The reputation of the trademark is not enough to prove typosquatting

Written by Dreyfus23/12/2021

When you are the owner of a well-known trademark and you detect a domain name that is almost identical to it, and moreover on sale for a substantial amount of money, it is tempting to consider that it is a case of typosquatting. However, it is essential to pay attention to details.

The Valeo Group

The Valeo Group, which specializes in the design, production and distribution of automobile components, and its affiliate, Valeo Services, have experienced this, after filing a complaint against the <valoservices.com> domain name registered in 2018, which was offered for sale for EUR 2288.

The applicants were respectively registered in 1955 and 1987 and the name VALEO was adopted in 1980. Together they have 59 research centers and 191 production sites. They have received numerous awards for their products. They also own several word marks based on the “VALEO” sign, notably in France, the European Union, China and the United States, and also hold semi-figurative marks including the name “VALEO SERVICE”. Finally, they operate the domain names <valeo.com> and <valeoservice.com>.

The respondent, who answered the complaint, describes himself as an engineer based in the United States who has a large portfolio of generic domain names.

The respondent believes that there is no likelihood of confusion between the disputed name and the complainants’ trademarks. It explains that “valo” means “light” in Finnish and that a search on the sign “VALO” on Google or on trademark databases does not reveal any trademark including “VALEO”.

While these arguments, especially the second one, are interesting, they have no place in the analysis of the likelihood of confusion between a trademark and a domain name, which consists of a simple side-by-side analysis of the two names. Since the omission of the letter “E” can be perceived as a spelling mistake, the expert considers that there is indeed a similarity between the signs.

After this first step, the expert does not address the issue of the defendant’s rights or legitimate interest, but directly addresses the issue of bad faith. On this point, the applicants state that their trademarks are very well known and rely on decisions of the Chinese and European Trademark Union Offices as well as on old UDRP decisions.

The Respondent reiterates its arguments regarding the use of the Finnish language and its clearance searches. The respondent states that it has several domain names in a foreign language or containing the term “service”.

The panelist is skeptical about mixing Finnish and English in a domain name but considers the respondent’s research that shows that a query on “VALO” does not lead to the complainants and the fact that many companies around the world are named VALO or have adopted a name beginning with VALO. Therefore, the complaint is dismissed. However, the expert points out that it is always possible to turn to a more appropriate procedure. The Panel also rejects the Respondent’s request to characterize the complaint as a reverse domain name hijacking.

Thus, it is advisable to put oneself in the shoes of the reserving party to determine whether he could have had knowledge of the trademarks, in particular by taking into account his country of origin and the field of activity in which the trademark is renowned. In this respect, the expert notes that the car parts sector is relatively discreet.

In order to offer our clients a unique expertise, necessary for the exploitation of intangible assets, we keep you informed about intellectual property and digital economy issues through articles written by Dreyfus’ legal team.

About this topic …

♦ Why is the well knownness of an earlier trademark not enough to qualify bad faith ?

Influencers: be careful not to promote counterfeit products!

Written by Dreyfus15/09/2021

The Internet has changed the way we do business. From now on, advertising agencies are no longer the only ones to promote their client’s products; influencers have become the privileged interlocutors of brands wishing to make their products successful. If this approach does not seem abnormal, legal actions are flourishing against these people, for trademark infringement.

In a recent case, “Petunia Products, Inc. V. Rodan & Fields, et al.”, the plaintiff Petunia Products (“Petunia”) filed a complaint against Rodan & Fields for infringement of its trademark “BROW BOOST”. The latter had hired the influencer Molly Sims in order to promote its “Brow Defining Boost” product. On August 6, 2021, Federal Judge Cormac J. Carney dismissed the influencer’s motion to dismiss the complaint of alleged trademark infringement, in particular, because the plaintiff had succeeded in demonstrating that the promotion of the contested product could mislead consumers and create a likelihood of confusion between the prior trademark and the defendant’s product.

In particular, the judge argued that the Federal Trade Commission (FTC) declared that influencers and celebrities could be held liable for false or, at the very least, misleading advertising. Judge Carney drew a parallel with the case at stake and considered that every statement made by an influencer could amount to liability. Besides, and this is the main point of the first decision in this case, the judge took into consideration the risk of confusion, keystone of any claim for trademark infringement. In this case, this risk was genuine since the products were in direct competition with each other, from two competing companies operating on the same market, with a very similar name.

However, this decision must be balanced insofar as Judge Carney only ruled on the motion to dismiss filed by the influencer.

Concept and role of the influencer

It is necessary to understand the legal definition of “influencer”. In the opinion in Maximian Schrems v. Facebook Ireland Limited, Advocate General Bobek defines influencers as “everyday, ordinary internet users who accumulate a relatively large following on blogs and social media (…)”.

The French Authority of professional regulation of advertisement (ARPP) defines an influencer as “an individual expressing a point of view or giving advice in a specific field (…)”. It adds: “an influencer can act in a purely editorial framework or collaboration with a brand for the publication of content (product placement, (…), distribution of advertising content, etc.)” (free translation).

The influencer, therefore, has the power to direct the choices of the people following him/her, which is all the easier as the social networks on which they act are increasingly simple of use and accessible to the greatest number. Because of this ease of use, two American influencers, Kelly Fitzpatrick and Sabrina Kelly-Krejci promoted counterfeit products on Instagram and TikTok for sale on the Amazon platform. Amazon, therefore, filed a lawsuit on November 12, 2020 against the two women for fraudulent promotion of counterfeit products.

What is the influencer’s responsibility?

First of all, and Judge Conrey noted this in his decision, the influencer must state on the publication that the promotion of the brand results from a collaboration with the latter.

In France, this is also a recommendation of the French Professional Advertising Regulation Authority but most of all a legal obligation, which the French law for confidence in the digital economy (LCEN) of 2004 had already formulated. If the influencer can escape the net and not be found guilty of trademark infringement within the framework of a collaboration (that would be different if he/she promotes an infringing product directly), he/she could, be found liable of parasitism, unfair competition or misleading commercial practice, all three of which are heavily sanctioned under Article 1240 of the French Civil Code.

However, it is noteworthy that the influencer bears the weight of his/her responsibility concerning the information he/she publishes! Therefore, if a plaintiff can prove that the influencer in question was fully aware that the product he/she was promoting infringes on a third party’s rights, then it is likely that a judge would find the influencer and the company that contacted said influencer guilty of trademark infringement, either jointly or individually. Again, the judge will also consider the extent to which the product advertised by the influencer could confuse the public mind.

Hence, being an influencer is not without risks, and the partnership agreement concluded with a company must be carefully examined beforehand. Analysing the environment is essential as well as the product to be promoted must not infringe upon the prior rights of a trademark, even more so a competitor.

Dreyfus is at your disposal to assist you in securing these projects.

ABOUT THIS TOPIC…

♦ Webinar – Influenceurs, réseaux sociaux et propriété intellectuelle

♦ Instagram and social networks : what rights do users have in their posted photos?

Artists: how can you defend your freedom of artistic expression?

Written by Dreyfus24/05/2021

In a decision handed down on 23 February 2021, the Paris Court of Appeal offers some guidelines in copyright infringement, recalls some key principles and provides an overview of all the usable means of defense.

In this case, the internationally renowned artist Jeff Koons was condemned for copyright infringement, in solidum with his co-defendants and the Court awarded €190 000 in damages. This amount greatly exceeds the amount awarded in the first instance, where the Court ordered Jeff Koons and his co-defendants to pay €135,000 in damages.

Let’s dive into the facts: in 1988, Jeff Koons started his “Banality” series of works, which consisted of creating three-dimensional objects inspired by various images. One of the works in this series, “Fait d’hiver”, shows a young woman in a fishnet corset, lying in the snow, with a small pig wearing a barrel around its neck.

In November 2014, the Centre Pompidou in Paris hosted a retrospective of Koons’ work, in which several works from the “Banality” series were exhibited, two of which have been subject to infringement lawsuits.

One of the two disputed works is “Fait d’hiver”. The designer of a 1989 advertising campaign for the company Naf-Naf, Frank Davidovici, sued the Centre Pompidou and Jeff Koons, among others, for copyright infringement of the campaign. At that time, the Naf-Naf brand’s Autumn/Winter collection was presented to the general public thanks to a photo of a young woman lying on the snow and accompanied by a pig, wearing a collar reminding one of a Saint Bernard dog.

On November 8, 2018, the Paris Court of First Instance found all the defendants guilty of infringing Frank Davidovici’s economic and moral rights. In their appeal, the defendants then set out all the possible defences in the context of such infringement action.

Was the “fair use” exemption a good idea?

Insofar as Jeff Koons’s work “Fait d’hiver” was conceived in the United States, the artist upheld that United-States law should have applied. To strengthen his argument, he relied on the Rome II Regulation, which seeks to preserve the principle of “lex loc protectionis” about “a non-contractual obligation arising from an infringement of an intellectual property right”. It would have been a mistake for Jeff Koons not to try to benefit from this Regulation, notably since American law provides for the “fair use” exception, which allows the exclusive rights of an author to be limited, in particular, to allow his work to be parodied (17 U.S.C. §107). But let’s remember that in 1992, Koons lost an action in which he had claimed this exception. At the time, the Court charged him with copyright infringement for his sculpture “String of Puppies”, which was considered a copy, with a few differences, of a photo taken by the American photographer Art Rogers. The judges deemed that the slight differences between the original photograph and the sculpture were insufficient to rule out infringement.

That said, and thus contradicting one of Jeff Koons’s arguments showing the differences between his “Fait d’hiver” and that of Naf-Naf, the Court of Appeal recalls that infringement is not assessed regarding the differences, but rather in terms of the similarities between the works involved.

Not too much of a surprise, the Paris Court of Appeal found that French law applied to “Fait d’hiver” insofar as the copyright infringement took place in France. Hence, the exception of fair use was not applicable in the present case.

Did Frank Davidovici have legal standing?

Koons then claimed that Frank Davidovici lacked legal standing. Indeed, the original photograph was a collective work and therefore the property of Naf-Naf. The evidence provided by the appellants was not enough for the Court of Appeal, which came to the same conclusions as at first instance, namely that the advertising campaign was not a collective work but a collaborative work, in which Frank Davidovici’s contribution could be “individualized”, and that the other authors had assigned their economic rights to him.

On the French five-year limitation period for infringement

The appellants argued that the work had been created more than 20 years before the subpoena (which took place on January 9, 2015), that it had been exhibited since 1995 in a Parisian gallery. In addition, they claimed that Jeff Koons displayed the reproduction on his website where he described it as ‘unmissable to anyone interested in [his] work’ and by “anyone”. Koons targeted the respondent.

The Court of Appeal rejected this argument since the respondents were criticising the exhibition at the Centre Pompidou, which had begun in November 214, i.e. two months before the subpoena.

Pleas in law based on the freedom of artistic expression and the parody exception

The appellants invoked Article 10 of the ECHR (European Convention for the Protection of Human Rights) to remind them that judges shall not interfere with the artists’ creative freedom or deny their artistic approach. However, this article also states that the artistic freedom of expression includes limitations, and in this case, the latter was legal since it relied upon Article L.122-4 of the French Intellectual Property Code. This article condemns any adaptation or transformation of a work without the consent of its author. Considering that the sculpture uses the dominant elements of the original photograph (the penguins and the pig’s flower necklace being of little relevance) and that it makes no mention of Davidovici’s work, Koons was obviously at fault. There is a very narrow line between inspiration and infringement of earlier work.

The appellants also sought to invoke the parody defence, relying on the definition given by the CJEU (Court of Justice of the European Union) in 2014 in the Deckmyn case, which stated that “the essential characteristics of parody are, first, to evoke an existing work while being noticeably different from it, and, secondly, to constitute an expression of humour or mockery“. The Paris Court of Appeal considered here that the humorous purpose was certainly not obvious, insofar as Koons described his “Fait d’hiver” as being “a work on renewal“, the illustration of the “process of self-acceptance“. Besides, according to the Court, there was a gap of almost 30 years between the advertising campaign and the sculpture. This period was so long that the public might not have perceived the parody.

The boundary between free inspiration and art infringement is very narrow, and sometimes difficult for artists to apprehend. Despite the solid defence strategy of Jeff Koons, one must acknowledge that it is essential to obtain prior approval before creating a work that may infringe the rights of another artist.

Infringement