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Between unfair commercial use and infringement of a reputed trademark: the fate of an identical brand name

 

In a decision of 10 July 2018 (no. 16-23694), the judges of cassation clarified the criteria for assessing unfair commercial use as well as the concept of just cause with respect to the usage of a well-known trademark, all within the scope of the disputed employ of the Taittinger surname. The affair opposes a member of the Taittinger family and the company Taittinger CCVC which acquired shares in the family-run company. For the Taittinger family sold all of the shares of this company, which owns a brand of champagne of the same name. One of the clauses in the transfer agreement was a hold harmless clause which stipulated that the members of the family undertook not to use the “TAITTINGER” trademark to designate products that would be in competition with the transferred business, namely the marketing of champagne. Later, one of the members of the Taittinger family filed the trademark “Virginie T” to designate various products and in particular champagne. To promote her activity, the applicant reserved the domain name but also several names reproducing her surname in full, including and . These latter redirect to the website attached to the domain name , where, moreover, the name Taittinger appears a number of times. As a consequence, Taittinger CCVC invoked the use of the Taittinger sign to promote and sell the champagne called “Virginie T” but also the “implementation of communication systematically oriented on the surname” Taittinger and summonsed the owner of the “Virginie T” trademark on the basis of breach of the transfer of securities contract, infringement of the reputed trademark “TAITTINGER” and unfair commercial use

 

The hold harmless (against the actions of the seller) clause 

While this point does not constitute the heart of the judgement, it nonetheless provides clarification on the scope of a mandate within the framework of the sale of securities. In the case at hand, the owner of the “Virginie T” trademark had mandated her father, with a substitution option, that he had moreover exercised, to sell her shares to Taittinger CCVC. In this respect, the Court of appeal had convicted Mrs Taittinger for having violated the hold harmless clause. The Supreme court of appeal recalled that the mandate encompasses only administrative acts, the agent can do nothing beyond what is included in their mandate. If the sale mandate authorised the agent to “subscribe to any undertaking or guarantee”, this did not imply the power to grant a prohibition or limitation on the principal’s use of the surname insofar as it constitutes a disposal of assets. The Supreme court of appeal therefore censored the judgement of the Court of appeal on this point.

 

Infringement of the reputed “Taittinger” trademark

One of the two main contributions of the judgement of 10 July 2018 lies in the appreciation of the concept of just cause vis-à-vis the use of a reputed trademark. Taittinger CCVC invoked article L713-5 of the Intellectual Property Code which stipulates that “the reproduction or imitation of a well-known trademark for products or services not similar to those designated in registration engages the legal liability of the author if it could be prejudicial to the owner of the trademark or if this reproduction or imitation constitutes an unjustified exploitation of the trademark”. While the reputation of the “TAITTINGER” trademark is not in dispute, Virginie Taittinger replied however by invoking the exception of just cause taken from article 5, 2° of the European directive 89/104/EEC of 21 December 1999 and in the light of which the French judge must interpret the French legislation. Consequently, the Court of appeal noted that the consumer was led to establish a link between the trademark transferred and invoked and the promotion of the products of Virginie Taittinger. However, the Court of appeal did not convict Ms Taittinger insofar as, recalling her family origin, she was not taking unfair advantage of the reputation of the “TAITTINGER” trademark, nor did she prejudice its distinctive value. The Court had then added that her name sufficed to identify her career path or her past experience, even with added photographs. In its order of 10 July 2018, the Supreme court of appeal therefore censored the judgement of the Court of appeal on this point. The Court emphasised that, in the light of the European directive, article L713-5 must be applied in two stages. The owner of the reputed trademark must first of all demonstrate that unfair advantage had been taken of the reputation of the trademark, then the third party must establish that there is just cause for the use of this reputed trademark, or a similar sign. Consequently, the Court of appeal should not have assessed the unfair advantage taken of the trademark in relation to the possible existence of just cause but should have assessed the unfair advantage once the infringement had been established. The novelty contributed by this judgment therefore resides in the fact, for the Supreme court of appeal, to indicate that the exception of just cause is not an element of the infringement against the trademark noted, but a fact that exonerates and applies once the infringement has been established. No further details were given, however, as to a possible definition or application of the concept of just cause. The fact that a well-known trademark is identical to the surname used by the third party could have been the occasion for the Supreme court of appeal to use this concept and, consequently, to clarify it.

 

Unfair commercial use

The Supreme court of appeal’s assessment of unfair commercial use in the judgement of 10 July 2018 constitutes its second contribution. In this respect, as recalled by the Supreme court of appeal, unfair commercial use “consists, for an economic operator, of placing itself in the wake of another in order to take advantage, at no expense, of their efforts and know-how, the recognition acquired or investments made”. The Court of appeal had thus also rejected the claims of Taittinger CCVC on the basis of unfair commercial use. According to the judges, the company had not established how adopting a corporate name or a commercial name as such would alone express the efforts and investments, in particular promotional, necessary to establish an act of unfair commercial use. Here again, the Supreme court of appeal therefore censored the judgement of the Court of appeal. According to the judges of cassation, the latter should have taken into consideration the prestige and recognition acquired, and not disputed, of the corporate name and of the commercial name of the company to examine whether or not an instance of unfair commercial use was present in the case in hand.

This judgement is therefore not only to be placed among the affairs dealing with a well-known trademark that is a homonym of a surname, but also provides a better understanding of the use of the concept of just cause in the context of the infringement of a well-known trademark, as well as the criterion of recognition in the framework of what constitutes an instance of unfair commercial use. Taking advantage of the reputation of a trademark does not necessarily therefore constitute infringement of a well-known trademark, but this can be a decisive factor with regard to establishing an instance of unfair commercial use for which there is no exception for just cause.

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French Data Protection Act: What’s New?

 

The new version of the French Data Protection Act (law n ° 2018-493 of June 20, 2018) was adopted on June 20, 2018. The first version (entered into force on January 6, 1978) was modified twice: in 2004 following the transposition of Directive 95/46 on the protection of personal data, and in 2016 following the French digital republic law. The latest version was adopted following  the General data protection Regulation 2016/679 on the protection of data (GDPR). The GDPR was adopted in May 2016 and implemented on May 25, 2018. The GDPR is directly applicable to all the EU member states. The new French Data Protection Act facilitates an effective application of the RGPD and the directive (UE) 2016/680. The new version is composed of 72 articles and includes the changes made to the previous French Data Protection Act. The GDPR replaces the national law in some areas like rights of data subjects, legal bases of the treatments, security measures, transfers, etc..

In other areas, the new French Data Protection Act integrates the GDPR. It applies to health data, criminal convictions and offense records, data processing for journalistic purposes, etc. Moreover, the GDPR includes 56 references to national laws of the EU member states. Thus, Data Protection legal framework is a mixed legal framework composed of national and European laws.

To reinforce the legibility of the composite legal framework, a Government Ordinance was adopted to add more details to the French Data Protection Act within six months. A new decree implementing the Data Protection Act is also expected to be adopted in the coming weeks. In the meantime, it is recommended by the French Data Protection Authority (CNIL) to pay particular attention to the legal framework applicable in each processing.

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Dreyfus – The Respect Zone Initiative

Respect Zone is a French nongovernmental organization that protects freedom of expression on the Internet through non-violent communication methods. The organization developed a cyber-violence prevention program that includes children protection as the most vulnerable group.

Dreyfus is an intellectual property boutique firm focusing on digital economy issues. The firm participates in the program and proudly displays Respect Zone ethical label on its website!

We support the initiative and encourage Internet users to moderate disrespectful comments, insults and bullying.

By displaying the Respect Zone label our firm affirms its’ commitment to online dignity and respect on our website and social media channels.

In an ever more complex digital environment, it is now imperative to effectively protect victims of cyber-violence and defend our right to freedom of expression.

For more information: http://www.respectzone.org/en/

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Dreyfus welcomes middle school and high school students as a part of the “Mieux Vivre Ensemble 16.93” initiative

After joining forces with Respect Zone in the fight against cyber violence, Dreyfus continues the pro bono initiative by participating in an event organized by the “Mieux Vivre Ensemble 16.93” group.

The group’s aim is to help middle school students who live in the Seine-Saint-Denis department, in Paris region finding their first internship and actively contribute to their career development by offering them new perspectives.

The group organizes the first Internship Forum event on December 8th, 2018 at the Chamber of Trades and Crafts in Bobigny for 9th grade students.

The students will get a chance to participate in a variety of workshops and activities including discovering trades, getting access to internship offers and coaching and mentoring programs. The event also includes a workshop for parents as well as a Parcoursup presentation.

Dreyfus is proud to be among the companies that offer internship opportunities for students. Our firm looks forward to welcoming a young intern who will learn about the importance and the means of protecting innovation.

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Brexit –Automatic conversion of European trademarks and designs and the withdrawal agreement

On November 14th, 2018 Theresa May’s   draft withdrawal agreement was approved by the British Government after 5 hours of deliberation by the Council of Ministers. A step has been taken towards securing a smooth withdrawal from the European Union (EU). However, two more steps need to be taken: obtaining an agreement of the 27 UE’s countries and, most importantly, the ratification of the agreement by the British Parliament.

 

If the withdrawal agreement is able to overcome both of these hurdles, what will be its impact on trademark rights?

 

There is no need to worry about intellectual property rights as EU directives have already been transposed into British legislation, and the level of protection remains unchanged.

 

For industrial property  rights, on the other hand, the withdrawal agreement intends to preserve the EU legal framework. Therefore, the transition of the protection of EU law to UK law will be ensured by several measures.

 

  • European trademarks and designs registered before December 31st, 2020 (the date EU treaties will no longer apply to the UK) will be automatically, converted into UK national rights, without re-examination or additional costs,
  • EU trademark and design rights declared invalid or revoked in proceedings that were initiated prior to December 31st, 2020, will also be declared invalid or revoked in the UK.
  • The holders of trademarks and designs registered before EUIPO (European Union Intellectual Property Office) with a pending application status at the time of the UK’s exit, will have 9 months as of the exit date to file a national application in the UK.
  • Applications filed through the UK national office will benefit from the same filing date and priority date as the original application filed with EUIPO.
  • Furthermore, the withdrawal agreement stipulates that IP rights exhausted both in the EU and in the UK before the end of the transition period shall remain exhausted.
  • However, European trademark owners will not lose their UK trademark rights due to lack of use of the European trademark in the UK before the end of the transition period.

 

The great innovation of the withdrawal agreement lies in a procedural clarification. The question that until recently remained unanswered by the withdrawal agreement was the process for obtaining protection in the UK. The new agreement now provides for  a cooperation between European and UK authorities. Therefore, all the information necessary to renew rights, held by EUIPO, must be transmitted to the UK authorities. Thus, European IP rights holders do not need to submit any documents or  pay additional fees.

These measures allow right holders to maintain protection in the EU by preserving an equivalent level of protection in the UK. . Nevertheless, if Brexit takes place without agreement, these transitional measures will not enter into force. For the moment such a possibility cannot be ruled out. That is the reason why every decision on EU trademark strategy must be considered very carefully. Dreyfus, trademark law experts, is able to assist you in the decision-making process in order to protect your intellectual property rights in this current climate of uncertainty.

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Contributions of the PACTE bill to patent matters

On 9 October 2018 the French National Assembly passed the bill entitled “Action Plan for Growth and Transformation of Enterprises” says PACTE. The purpose of this bill is to foster economic growth by giving businesses the means to innovate, transform, grow and create jobs.

In concrete terms, this action plan has been developed around six themes: “Creation, Growth, Transmission and Rebound”, “Value Sharing and Corporate Social Engagement”, “Financing”, Digitisation and Innovation “,” Simplification “and” Conquering of International markets”.

Innovation at the heart of the debates

On each theme, and this is the originality of this action plan, parliamentary/business leader pairs have been formed to formulate proposals suited to the economic reality. It is in this context that the National Company of Industrial Property Attorneys  or “Compagnie Nationale des Conseils en Propriété Industrielle” (CNCPI) was consulted, in particular with the National Intellectual Property Institute or “Institut National de la propriété intellectuelle” (INPI), regarding “Digitisation and Innovation”.

Introduction of provisional patent applications in French law

The provisional patent application is based on the US “provisional patent application” which makes it possible to apply for a patent at reduced cost without having to respect the imposed formal requirements. This provisional application must be regularised within 12 months subject to being deemed abandoned.

The aim is to encourage companies, especially SMEs, to access patent applications by giving them the possibility to submit, on a provisional basis, their application in the form of a draft and to regularise it within one year. The advantage for companies would be to be able to continue to develop their patent while benefiting from the earlier date of this first filing of the patent application.

This measure is widely criticised because of its dangerous nature since the patent can only protect what is in the provisional application and not future developments. This proposal, far from encouraging innovation, may increase companies’ reluctance to file patents.

This measure, removed from the PACTE bill, will be introduced by regulatory means.

Towards revitalisation of the utility certificate

The aim of the PACTE law is to extend the period of validity of the Utility Certificate and to promote its use among companies, particularly SMEs.

Article 40 I.1 of the bill passed by the National Assembly extends the period of validity of the utility certificate from six to ten years.

Article 40 I. 3°, for its part, creates a new bridge between the utility certificate and the patent by allowing the transformation of an application for utility certificate into a patent application.  Up until now, only the opposite was possible.

Introduction of the rejection of a patent application for lack of inventive activity

Another novelty, Article 42 bis of the bill amends points 5 and 7 of Article  L612-12 of the French Intellectual Property Code (CPI) to provide that a patent application may be rejected on the grounds of a lack of inventive activity.

The opening of a right of opposition to patents

This measure, provided for in Article 42 of the bill aims to create a right of opposition to patents in order to allow third parties to obtain the withdrawal or amendment of a patent by administrative means.

This proposal is intended to prevent abusive proceedings without, however, specifying what would be abusive proceedings or sanctions. It remains to be determined whether the common law system will be applied (i.e. civil liability) or whether a special system will be provided.

These provisions will be implemented by means of a ministerial order.

Next step: examination of the PACTE bill in January 2019 by the Senate. To be continued…

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Dreyfus participates in the Salon LegalTech from 27 to 28 November

Dreyfus is an intellectual property consulting law firm offering a wide range of services designed for businesses involved in the digital revolution.  Dreyfus takes on the challenges of tomorrow’s world and will be present at LegalTech the 27th and the 28th of November at the Cité des Sciences in Paris.

LegalTech is a major event catered to legal professionals who need one meeting place where they can discuss all the issues related to law practice.

We are excited to announce a presentation given by the founder of Harbor Technologies, Emmanuel Harrar, that will take place on November 28th at 10:15 at the level S2, booth 223.

You will get an opportunity to ask questions concerning intellectual property rights protection and innovation in the domain of trademarks, industrial design, patents, models, copyrights, domain names, social networks, and much more!

Dreyfus expertise

Dreyfus assists companies managing, valuing and defending their intellectual property in the digital and analog worlds.

 Dreyfus approach

The firm has developed comprehensive online trademark monitoring services that include a domain name monitoring service. Dreyfus provides consulting services for acquisition, maintenance, valuation and defense of Intellectual Property rights in France and abroad.

Do you have any questions regarding intellectual property rights management? Meet us at the booth 223, lelev S2 !

 

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Dreyfus & associés featured in a Xerfi research

We are proud to announce that Dreyfus was ranked as one of the most innovative French IP firms in a recent study conducted by Xerfi group.

The research titled “Trademark and Patent attorney firm perspectives for the year 2021. Internationalization, digital transition, inter-professionalism: what are the growth factors?” refers to Dreyfus as an exemplar IP law firm in many areas including domain names and defense strategies for companies and individuals on the Internet. The study also mentions the Dreyfus IPweb platform as one of the firm’s competitive advantages as it facilitates communication by offering our clients the ability to track all the information related to their file in real time.

Our award-winning IP law firm continues to invest in research and development to provide clients with top-notch services.

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Caudalie wins their case against the 1001pharmacies platform

In their quest to valorise brand image, companies may have recourse to a selective distribution network, which was considered legal in a decision of the Paris Court of Appeal on 13 July 2018, subject to the choice of the resellers being made according to objective criteria of a qualitative nature.

In its economic definition, the trademark constitutes a rallying sign for the customers. When acquiring a product bearing such a trademark, the consumer is in a position to expect to find the associated quality, and particularly so regarding luxury goods.

In a strategy to preserve the luxury image of their products, Caudalie set up a selective distribution network with the pharmacists, organised around two types of contracts:

-One for sales within the pharmacy,

-The other linked to the first, allowing the addition of online sales over the Internet.

The aim of the strategy was therefore to exclude the commercialisation of their products via third party platforms.

Pursuant to the implementation of this process, Caudalie ordered the company Enova Santé, creator of the 10001pharmacies platform through which pharmacists can sell their products to the public, to cease commercialisation of Caudalie brand products and delete any references to these products from the site.

From several court decisions, a lengthy debate emerged on whether or not Caudalie was entitled to prohibit the pharmacists in their network from visibly using the third party platforms for internet sales of their products.

The litigation ended with a decision on 13 July 2018 from the Paris Court of Appeal which considered that prohibiting online sales of Caudalie products on a platform such as 1001pharmacies did not constitute a hardcore restriction of competition.

In the case at hand, Caudalie brand products are classified as luxury products and the mere fact that they are parapharmacy products does not confer on them the characteristic of banal (sic) products, contrary to the statements of Enova Santé. Thus, the prohibition to sell via third party platforms appears proportionate to the aim of preserving the luxury image of these products. It was in fact appropriate to observe that the display conditions on 1001pharmacies.com was of a nature to harm the luxury image that Caudalie may legitimately wish to protect. As an example, alongside the Caudalie products, the platform proposed products with vastly differing characteristics such as fire alarms and CCT cameras.

This decision reminds us of the Coty affair of 6 December 2017 (The case Coty of 6 December 2017) in which the European Court of Justice stated that “the quality of such goods is not just the result of their material characteristics, but also of the allure and prestigious image which bestow on them an aura of luxury, that that aura is essential in that it enables consumers to distinguish them from similar goods.

Thus, while this decision confirms the jurisprudence according to which only an objective justification can legitimize a ban on sales in a selective distribution network, a nuance should be added. The decision demonstrates that an analysis must be carried out on a case by case basis, in particular concerning the hypotheses where a company restricts its distribution network for questions of image. For indeed, an assessment of whether or not something harms a brand image necessarily induces an element of subjectivity.

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BREXIT – LATEST DEVELOPMENTS IN TRADEMARK LAW

Following the vote of the British people on June 23, 2016 to leave the European Union, the British authorities have issued several statements about the impact of Brexit on trademark law. As the official date of the UK’s exit from the European Union approaches on March 29, 2019, it is increasingly likely that a Brexit without agreement (“hard Brexit”) will take place. This possibility must be taken into account in order to avoid any setbacks when the day comes.

This past summer the UK Parliament stated that EU trademarks will clone into the UK register, automatically and without payment of additional fees, following Brexit.

The latest communication on the matter comes from the Department of Business, Energy and Industrial Strategy, on September 24th. The latter issued a Guidance Notice in the event of a Brexit without  agreement which confirmed the statements of the UK Parliament on the automatic duplication of EU trademarks in the United Kingdom, without additional fees, following the exit of the UK from the European Union. It was also announced that EU trademark applications pending on Brexit day would benefit from a 9-month period during which a national trademark application in the United Kingdom incorporating the same characteristics of the EU trademark would be possible.

It must be borne in mind, however, that nothing is definitively fixed and that the probability that a Brexit without agreement will take place is quite high. We therefore maintain our advice. Thus, out of caution, we strongly recommend that you register a national trademark in the United Kingdom alongside any EU or international trademark application designating the EU. In addition, for your most important European trademarks, it may be useful to register a national trademark in the United Kingdom. Finally, we also recommend that for any national trademark application filed in the United Kingdom to file in parallel a trademark application in the European Union in order to maintain the opportunity to file opposition against a European Union trademark after Brexit.

 

In the event of a Brexit with agreement, EU trademark applications or trademarks or international trademarks designating the EU would be protected in the United Kingdom, which could lead to duplication. In such a case, it will be necessary to redefine your trademark strategy.

To be continued !

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