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In the dynamic and often complex world of intellectual property (IP) management, understanding the value of IP assets such as trademarks, softwares, and domain names is paramount. For businesses, these intangible assets are not merely legal rights; they represent substantial economic value that can drive growth and competitive edge. Therefore, effective evaluation and valorization of these assets are crucial for strategic IP management, financing decisions, and maximizing returns.

How we proceed

The evaluation of a trademark involves a comprehensive analysis of its visibility, its market impact, and legal protection. The process includes assessing the trademark’s recognition among target consumers, its association with quality or prestige, and the legal breadth covering geographic scope and product classes. Valorization hinges on financial metrics such as revenue from licensing agreements, market penetration rates, and the potential for expansion into new markets or product lines. Strategic use of trademarks can enhance brand value and create new revenue streams through brand extensions.

For domain names, the focus is on evaluating their effectiveness in driving online traffic (SEA potential) and their alignment with a company’s branding strategy. Key factors such as keyword relevance, memorability, and historical traffic data are crucial. Financially, domain names can be appraised based on comparable sales, potential advertising revenue, and their impact on reducing marketing costs. The strategic acquisition or sale of domain names can significantly affect a company’s digital presence and market reach.

Finally, software assets are appraised through both technical and market-driven lenses. Initially, a qualitative analysis evaluates the software’s functionality, user base, scalability, and technical robustness, which includes an assessment of code quality, cybersecurity measures, and compliance with licensing. A financial valuation may consider direct revenue from sales or licensing, the cost to replace or replicate the software, and a market comparison approach. This comprehensive analysis helps ascertain the software’s contribution to a company’s valuation, taking into account its ability to generate revenue, facilitate business operations, or provide a competitive advantage.

Our expert services

Our firm provides specialized services for the evaluation and valorization of IP assets, ensuring accurate and compliant appraisals. We assist clients in strategic decision-making, leveraging our legal expertise and market insights to enhance the value of IP portfolios. Our team, including an expert accredited at the French Supreme Court (Cour de Cassation), is dedicated to upholding the highest standards of legal integrity and strategic insight.

Whether you are considering a merger, acquisition, or need to assess the IP value for financial reporting, our team is equipped to provide detailed analysis and strategic guidance. By engaging our services, businesses can not only safeguard their IP assets but also optimize their value in line with corporate objectives and market opportunities.

Dreyfus & associés partner with an international network of Intellectual Property attorneys

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A paradigm Shift in AI Governance

The European Union’s Artificial Intelligence Act (EU AI Act) was presented by the Commission in 2021. The European Union’s recent push to regulate artificial intelligence (AI) has sent ripples across the tech world, marking a significant shift in how generative AI models like ChatGPT, Bard, and others will operate.

In a recently negotiated compromise on the European AI Act of December 8, 2023, the focus has sharpened on copyright laws concerning data used in training these AI models.

As the legislation is still under wraps, experts are dissecting the potential impacts based on the EU’s official communications.

Key Obligations for Generative AI Model Creators: Ensuring Transparency and Respect for Copyright

Transparency in Data Usage: The proposed regulation emphasizes the importance of transparency. AI creators must publicly provide a sufficiently detailed summary of the content used for training their algorithms. Though the exact precision of these summaries is yet to be defined, the intent is clear: it aims to identify the rights holders, paving the way for possible compensation negotiations. This move is seen as a win for content creators, including authors, scriptwriters, and media companies, whose work might have been used without direct compensation.

Respect for European Copyright Law: AI enterprises must comply with European copyright laws, a seemingly obvious but vital requirement. This includes adherence to opt-out clauses, allowing rights holders to refuse the use of their content by AI systems. Institutions like the French collective management of author’s rights SACEM have established such clauses.

In depth analysis: Assessing the Impact and Challenges Ahead

Despite the positive outlook, the exact implications remain in the air until the technical meetings conclude. The SACD, among other institutions, expresses cautious optimism but emphasizes the importance of not backtracking on the progress made.

Firstly, while the regulation’s intent to protect copyright holders is commendable, the enforcement and practicality of these rules are somewhat ambiguous. The requirement for a “sufficiently detailed summary” of data used in AI training is vague and could lead to varying interpretations, creating potential loopholes or burdensome compliance processes.

Moreover, the obligation to respect European copyright laws, including opt-out clauses, may be seen as a significant step towards empowering creators. However, this could also impose substantial limitations on the development and scalability of AI technologies, potentially stifling innovation and economic growth. The balance between protecting individual rights and promoting technological advancement seems to be a delicate one, and this regulation might tilt the scales unfavorably for the AI industry.

The tension between transparency and protecting trade secrets is another critical point. Complete transparency of training data could indeed harm businesses, revealing proprietary methods and competitive advantages. The proposed solution of limited disclosure to regulators or trusted entities might mitigate some risks, but it also adds layers of bureaucracy and complexity, possibly slowing down AI development and deployment.

Furthermore, while the regulation is a European initiative, AI is inherently global. The differences in legal and ethical standards across borders might lead to conflicts or compliance challenges for multinational companies. This could inadvertently create a fragmented digital landscape, where AI technologies and their benefits are not evenly distributed.

Lastly, while the regulation aims to protect existing industries and creators from the disruptive impacts of AI, it might also hinder the creative potential and societal benefits that generative AI promises. The cultural and creative sectors could experience a slowdown in innovation if overly restrictive measures are put in place.

The effectiveness and fairness of these measures will depend on their implementation and the continued dialogue among stakeholders. A balanced approach is required to safeguard individual rights and cultural heritage while fostering innovation and global collaboration in the AI domain.

A Nex Era of AI Regulation Begins

As the technical discussions proceed and the final vote nears, stakeholders from all sides are keenly watching, hoping to influence the outcome in their favor. This regulation could set a precedent, not just for Europe, but globally, as countries grapple with the fast-evolving landscape of AI and its widespread implications. The unfolding narrative of the European AI regulation is a testament to the complexities of governing frontier technologies and the need for comprehensive, adaptive, and inclusive policies. The world watches as Europe takes these pioneering steps, setting a precedent for AI governance worldwide.

Introduction

Artificial Intelligence (AI) is increasingly integrated into various sectors, significantly impacting society, economy, and governance.

The European Union is in the process of establishing a comprehensive AI-specific regulation. A proposal, the European Union’s Artificial Intelligence Act (EU AI Act) was presented by the Commission in 2021, aiming to set harmonized rules for AI to ensure safety, compliance with fundamental rights, and environmental sustainability.

On December 8, 2023, the European Parliament and Council reached a significant milestone by agreeing on the EU AI Act. This act is celebrated as a “global first”, marking the EU as the forerunner in the comprehensive legal regulation of AI. This legislative act aims to ensure that AI systems used within the EU are safe, uphold fundamental rights, and adhere to EU values, while also promoting investment and innovation in AI technologies.

This article provides an in-depth look into the EU’s legislative journey and explores the critical components, implications, and future prospects of the European legal framework for AI.

Risk-based Approach to AI Regulation

The legislation is built on a risk-based approach, categorizing AI systems into four levels of risk: unacceptable, high, limited, and minimal/no-risk. These classifications guide the extent and nature of regulatory requirements applied to each system, focusing significantly on unacceptable and high-risk AI systems.

Unacceptable-risk AI systems: This category includes AI applications considered a clear threat to safety, fundamental rights, or EU values. Examples include systems that manipulate human behavior or allow untargeted scraping of biometric data. Such systems are prohibited outright.

High-risk AI systems: This category encompasses AI systems that could potentially cause significant harm in critical areas like infrastructure or law enforcement. They are subject to strict compliance obligations, including risk mitigation and transparency requirements.

Limited-risk AI systems: These AI systems must adhere to minimal transparency obligations. They include technologies like chatbots or certain biometric categorization systems.

Minimal/no-risk AI systems: The majority of AI applications fall into this category, where the risk is deemed negligible. The use of these systems is freely allowed, with encouraged adherence to voluntary codes of conduct.

Safeguards for General-Purpose AI Models

An innovative aspect of the EU AI Act is its approach to regulating general-purpose AI (GPAI) models, which are systems or models that are not designed for one specific task but rather can be used across a wide range of tasks and sectors. They are foundational in nature, often serving as a platform on which other, more task-specific AI systems are built. Examples of general-purpose AI include large language models like GPT-3 or image recognition systems that can be applied to various sectors from healthcare to automotive to entertainment.

After intense debate, the Act introduces obligations for all GPAI models, with additional requirements for those posing systemic risks. This tiered approach aims to balance the need for regulation with the desire to not hinder technological advancement.

Enforcement Framework and Penalties

The Act will be enforced through national competent market surveillance authorities, with coordination at the EU level facilitated by a European AI Office. The European AI Board will serve as a platform for member states to coordinate and advise the Commission. Penalties for non-compliance are substantial and tailored to the severity of the infringement, with more proportionate fines for smaller companies and startups.

Anticipated Impacts and Future Steps

As the EU AI Act nears official adoption and implementation, a two-year grace period will begin for entities to comply, with certain prohibitions and GPAI obligations taking effect earlier. This transitional phase is vital for establishing robust oversight structures and ensuring stakeholders are fully prepared to meet the new regulatory requirements.

Conclusion: A Paradigm Shift in AI Governance

The European Union’s Artificial Intelligence Act represents a significant stride towards responsible and ethical AI development. By enacting a comprehensive, risk-based regulatory framework, the EU aims to protect citizens and uphold democratic values while fostering an environment conducive to innovation and economic growth. The Act’s influence is expected to extend beyond Europe, setting a precedent for global AI governance and encouraging international collaboration in creating a safer AI future. As the EU navigates this uncharted territory, the world watches and learns, ready to adapt and adopt measures that ensure AI benefits all of humanity while mitigating its risks.

The rapid emergence of generative artificial intelligence has significantly impacted the intellectual property law landscape, attracting widespread attention. In France, the existing copyright laws do not explicitly address how they apply to works created by AI.

French copyright law traditionally protects original works, Under French copyright law, protection is granted to original works, regardless of the form in which they are expressed. However, the law provides no specific guidance on how to apply these principles to AI-generated content. As a result, there is some uncertainty as to whether AI-generated works can be protected by copyright.

On September 12, 2023, French legislators from the Assemblée Nationale presented a law proposal to the Presidency specifically designed to clarify copyrights rules related to AI.

In this article, we delve into the key provisions of this bill, offering a critical analysis of its strengths and weaknesses.

Analysis of the law proposal on AI and Copyright of September 12 2023

Preamble of the draft law

The preamble outlines the objective of the law, which is to “protect authors and artists of creation and interpretation based on a humanist principle, in legal harmony with the Intellectual Property Code”.

The preamble gives an example of what a AI generated creation is with the 2016 creation of “The Next Rembrandt” made by a computer and a 3D printer, long after the original artist’s demise. However, we should note that it is a shame that the only example mentioned in the preamble is a creation dated from 2016 (created 7 years before the draft law). More contemporary examples would have been appreciated.

Through collective management, this proposal seeks to ensure fair and equitable remuneration for authors and artists of creation and interpretation, and to ensure the traceability of authors and artists whose work has been used by AI.

Articles of the draft law

The draft law is divided into four articles which act as amendments to existing articles of the Intellectual Property Code (IPC).

1. Preamble to Article L 131-3 of the IPC: Authorizing AI Integration of Copyrighted Works

The first change to article L 131-3 of the IPC – which deals with the transfer of author’s rights – involves adding a new paragraph. This new paragraph states that “the integration by artificial intelligence software of intellectual works protected by copyright, and their exploitation, is subject to the general provisions of the IPC, and therefore to authorization by the authors or right holders”.

Adding such a paragraph to a provision primarily focused on copyright assignment formalities raises questions about its appropriateness.

Moreover, it’s worth noting that the existing reproduction right may already cover aspects related to exploitation and authorization by the author. However, if this inclusion necessitates authorization from the original work’s author, it could become cumbersome in practice. Therefore, collective management, as seen in reprographic reproduction rights in France, might offer a more practical solution.

Finally, this amendment could conflict with the existing European (DIRECTIVE 2019/790 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 April 2019 on copyright and related rights in the Digital Single Market) and French (Article L122-5-3 IPC) provisions regarding the Text and Data Mining exception and limitation.

2. Addition of Nine Paragraphs to Article L 321-2 of the IPC: Authorship and the Role of Collective Management Organizations in AI Generated Work

Article 2 introduces nine new paragraphs into article L 321-2 of the IPC, as regards to the legal actions and roles of collective management organizations. These organizations handle copyrights on behalf of rightsholders in a collective manner.

The first paragraph of this amended article reads: “When the work is created by artificial intelligence without direct human intervention, the only rights holders are the authors or rightsholders of the works that made it possible to conceive the said artificial work”. Subsequent paragraphs aim to facilitate collective management of AI-generated rights and the distribution of corresponding remuneration by collective management organizations.

Once again, the inconsistency in codification is evident. First, the term “work” suggests that AI outputs are indeed copyrighted works (oeuvres).

The phrasing “Without human intervention” is not appropriate since nearly all works involve at least some human intervention.

Finally, this amendment assigns ownership of the work to the authors or rightsholders of the works that enabled the creation of the said artificial work. However, the new paragraph does not specify how the collective management organizations would identify those “authors or rightsholders of the works”. A possible approach could be to view each contributor of input data used in the AI’s training process as a co-author of the resulting work. This perspective acknowledges that every output from the AI is essentially a derivative of all its various inputs.

Thus, to enhance legal clarity, it might be more appropriate to create new articles specifically dedicated to the collective management of works generated by AI.

3. Amendment to Article L 121-2 of the IPC: Transparency and Authorship

Article 3 introduces a new paragraph into article L 121-2 of the IPC, which deals with the exclusive right of publication of a work (droit de divulgation).

This paragraph mandates the inclusion of “work generated by AI” and the insertion of the names of the authors of the works that lead to the creation of such work.

However, this paragraph suggests, once again, that AI works are protected by copyright as it is included in an article dedicated to one of the most important exclusive rights of the authors. In fact, article L 121-2 of the CPI predominantly addresses the authors’ right of disclosure.

More, while this new paragraph aims to distinguish AI-generated from non-AI-generated works, its placement in this article appears inappropriate. Creating a new article dedicated to this matter might offer better clarity.

Furthermore, the requirement to include the names of the authors of the original works raises questions about the existing provisions for protecting authorship rights.

Interestingly, these references seem to parallel the mandatory labeling of “retouched photograph” in commercial advertising, where models’ photographs are used.

4. Amendment to Article L 121-2 of the IPC (Article 4): The new Taxation System for AI Companies

Lastly, the bill concludes with article 4, amending article L 121-2 of the IPC – as regards to publication right – where the aforementioned concerns about codification consistency apply once more.

These three paragraphs introduce a taxation system, to be paid by the AI system-operating companies, to collective management organizations, when the origin of an AI work cannot be determined.

Article 4 notably draws a connection to article L 324-14 of the CPI, which addresses cases where identifying right holders is impossible. In such situations, the amounts collected are treated as non-distributable funds, the allocation of which appears to be guided by collecting societies’ general policies. This proposed law goes a step further by converting these non-distributable funds into a tax designed to promote creative endeavors. As it stands, this paragraph seems to establish a tax that most creators will never benefit from.

More, the risk here is that AI companies will cease to provide services in France.

Final Thoughts: Balancing Act in Adapting Copyright Law for the AI Age

The bill aims to adapt copyright law to the AI era, addressing author remuneration through a collective management system. However, it has notable shortcomings and lacks clarity, particularly regarding how it handles exceptions like parody or pastiche. While it takes steps towards necessary legal reforms, it leaves many questions unanswered and may require additional refinement to be truly effective.

Introduction: The intersection of language and law in EU Trademark Disputes

In a landmark decision on July 26, 2023, the European Union Court underscored the critical role of linguistic analysis in adjudicating cases of brand confusion. This case, involving the nuanced understanding of language in trademark law, sets a precedent in legal circles and offers a comprehensive look at the intricate nature of trademark disputes within the EU’s dynamic linguistic landscape.

Background: The Case of Frutania vs. Frutaria

In 2013, Markus Schneider filed a trademark application for EU figurative trademark “Frutania,” covering various products and services. Frutaria Innovation, SL, holder of the EU figurative mark “Frutaria” registered in 2010, filed an opposition.

In July 2023, the European Union Court acknowledged a risk of confusion between the “Frutania” trademark application and the earlier “Frutaria” mark. The Court indeed emphasized that, in assessing confusion between two EU trademarks, linguistic knowledge must be considered.

Linguistic Considerations: Assessing the Risk of Brand Confusion

A crucial argument in this case involved the definition of the concerned public. The group of consumers considered relevant in assessing the risk of confusion can be challenged, namely the Bulgarian, Croatian, Slovak, Czech, Polish, Slovenian, Hungarian, Estonian, and Finnish populations, for whom the use of the term “frutaria” was arbitrary and therefore distinctive.

The inclusion of the Lusophone and Hispanophone public in this assessment is also questionable. These populations perceived in the earlier “frutaria” mark an evocation of the Spanish term “frutería” (grocery, fruit store). Therefore, the overall and particularly conceptual differences between the “Frutaria” and “Frutania” signs are significant enough to exclude any risk of confusion.

Nevertheless, in its decision, the appeal board indicated that it could not be assumed that consumers in Slavic-speaking countries as well as in Hungary, Estonia, and Finland had sufficient knowledge of Spanish to understand that the term “frutaria” was close to “frutería,” which designated a fruit store.

Legal Precedents and Linguistic Proficiency

Jurisprudence confirms this viewpoint, asserting that mastery of a foreign language cannot be generally presumed (cf. particularly the decision of the European Union Tribunal of September 13, 2010, in the case Inditex/OHIM v. Marín Díaz de Cerio (OFTEN), Case T-292/08 [paragraph 83]).

Although it is generally accepted that most consumers know basic English terms, it seems that this is not the case for the Spanish language. Consequently, the verbal element “frutaria” is distinctive and predominant compared to the simple figurative elements, which are therefore secondary.

In this particular case, the tribunal noted that the Appeal Board had correctly assessed the intrinsic distinctiveness of the earlier mark, taking into account the importance that the word element of the earlier mark could have for the part of the relevant public composed of Bulgarians, Croatians, Slovaks, Czechs, Poles, Slovenians, Hungarians, Estonians, and Finns. Therefore, the tribunal concluded that the Appeal Board had made no error in judgment by focusing its examination of the risk of confusion on this specific part of the relevant public.

Implications: A Refined Approach to EU Trademark Law

The Tribunal, referring to relevant jurisprudence, highlighted that when an earlier mark on which opposition is based is a European Union mark, it is not necessary for the risk of confusion to exist in all Member States and all linguistic areas of the European Union. The unitary nature of the European Union trademark allows it to be invoked against any subsequent trademark application that could potentially infringe on the protection of the first mark, even if the confusion is limited to a specific part of the European Union.

In other words, just because the risk of confusion could be ruled out for Lusophone and Hispanophone countries, based on conceptual differences, does not mean it did not exist for other countries of the European Union.

Conclusion on Linguistic Factors in EU trademarks

The EU Court’s decision in July 2023 marks a pivotal moment in trademark law, weaving linguistic intricacies into the fabric of legal reasoning. As businesses continue to operate in an increasingly globalized market, the significance of linguistic considerations in legal strategies becomes ever more pronounced. This case not only sheds light on the complexities of trademark disputes but also establishes a precedent for incorporating linguistic analysis into legal practice within the European Union and beyond.

Legal Watch: Apple Corporation legal challenges to obtain full trademark rights on the generic “Granny Smith” Apple

In 2017, the Swiss Institute of Intellectual Property (IPI) rejected Apple Corporation’s first trademark application for a novel Apple image. Following the decision, Apple filed multiple appeals for the proposed mark for use in several technological areas. These tech areas include digital and electronic consumer goods, audiovisual, video, new technologies, media, and cinematographic recordings. Apple then appealed to the Federal Administrative Court, which upheld the decision of the IPI and denied Apple’s novel logo, once again. In an attempt to overturn the verdict, Apple went as far as to handle this legal matter internationally to global IP legal professionals and court officials, which yielded mixed results. The Federal Institute for Intellectual Protection (IPI) 2022 decision highlighted how the multinational corporation proposed mark lacked the distinctive character necessary to claim protection. In other words, the image would not sufficiently identify and distinguish the designated goods or services, thus leading to confusion between similar marks. Eventually, in recognition of Apple Corp.’s rigorous efforts, IPI changed its verdict and granted partial rights to limited categories. However, in opposition to the court verdict, Apple filed another appeal in the spring of 2022. Apple aims for complete ownership and legal rights over the Apple image.

Apple Corporation’s novel mark consists of a black-and-white image of an apple similar to the Granny Smith apple. In 1868, the Granny Smith apple was discovered and became the most infamous green and sour apple from the orchard of Ryde, New South Wales, Australia, by farmer Maria Ann Smith (also known as Granny Smith). The Granny Smith Apple is renowned as one of the top five commercially grown fruits in the U.S. and the first variety of apples exported globally for sale in supermarkets. Given the generic nature, the apple image has been identified as a non-specific product in the public domain with no brand name or registered trademark. Throughout history and modern times, the apple served as a versatile icon. The apple image versatility displays through commercial sectors like the arts, retail stores, technology businesses, and entertainment. Due to the apple image’s generic nature, Apple Corporation’s claim creates controversy regarding the permissibility of a generic fruit registered as a tech corporation’s official trademark. Concerning legal matters pertaining to similarities between marks, the risk of confusion for consumers, the negative impact on local farm-growing businesses, and cases of infringement.

Along with certain court officials, Fruit Union Suisse Director Jimmy Mariethoz also expresses concerns about Apple Corp’s degree of action to gain the new Apple mark. In such a case, the corporation and worldwide businesses could result in impending events like forced alteration of logos, re-establishing business identities, and loss in revenue due to legal proceedings and charges. All this global detriment could happen due to one’s corporation’s desire to obtain something that was once a public shared commodity. In an attempt to protect its own apple mark, Fruit Union Suisse continues to voice opposition to this multinational corporation’s unwavering legal pursuit. Fruit Union Suisse is Switzerland’s oldest and largest fruit farmer’s organization. For many years, the association promoted Swiss fruit growers’ commercial interests. In addition, the association maintained its red apple emblem, adorned with a white cross. The association symbol is a representation of the country’s state flag. For the organization, a change of its mark is a decline in commercial operations, stripped of culture and tradition, and an erase of rights and freedoms.

As Apple’s claim for full rights to the image is unsettled, Intellectual Property professionals will closely monitor the court’s decision. The IPI’s decision could result in global economic and legal changes. In light of this new development, changes in the IP global landscape have placed corporations in positions that detail transformative aims to maintain a competitive advantage. Companies’ plans like business expansion, modifying products, and altering logos come with unforeseen results. Occasionally, one must take risks or thorough analysis for decision-making. Thus, there is much to consider in trademark protection and ownership pertaining to common goods. In addition, other apple image brand companies are likely to be significantly impacted. Overall, the visual representation or any advertisements of an apple is potentially affected.

A well-known trademark does not defeat the use of a term in a descriptive manner

According to a decision rendered on December 8, 2022, a WIPO expert ruled on a RIPO complaint filed by B.S.A., a subsidiary of Lactalis Group. The complaint was regarding the famous “PRESIDENT” Camembert, which marketed several cheese types under this trademark. The trademark “PRESIDENT” has been registered in Australia since 1978 by B.SA., in class 29. 

The Disputed Domain Name, <president.com.au>, was registered on June 22, 2006, by Internet Products Sales & Services Pty Ltd. This is a company specializing in domain registration and resale. By registering such a domain name, the company is taking advantage of the likelihood that people may use the domain name to search for information related to “President”. This gives the company the opportunity to generate revenue from pay-per-click links. The disputed name links to a page with pay-per-click links such as “Presidents of the Senate”, “Presidents of America” and “Presidents of a Company”. As a reminder, pay-per-click is a business model where the advertiser compensates the host of an ad based on the number of interactions it has generated. The page also indicates that the domain name “could be for sale”, proposing a form to submit an offer, without indicating a price. In support of its complaint, the Complainant invokes the reputation of its trademark “PRESIDENT” and argues that the Disputed Domain Name was registered with the sole purpose of being resold to it at a high price. 

In the Complainant’s view, the domain name was registered to sell it to the Complainant. The commercial link page prejudices the Complainant. However, there is no evidence that the Respondent targeted the Complainant’s trademark. The fact that it offered a form to redeem the domain name is not sufficient to prove bad faith. The Complainant further argues that the Respondent, which holds a large portfolio of domain names (more than 7,000), had a duty to check registrations for infringement of third-party trademarks. The Panel notes that in the case of domain names consisting of generic terms and used for that purpose, it is difficult to blame the Respondent for not conducting a trademark search. In addition, there is no evidence in the record that the Respondent used the name in connection with the Complainant’s business. The Panelist notes that, despite a substantial domain name portfolio, the Respondent appears to have only registered names composed of dictionary terms between 2006 and 2022. The Respondent was the target of only one successful UDRP complaint. In this case, the Complainant must present even stronger arguments: “Generally speaking, the less unique the complainant’s trademark or name, the more likely it is that the respondent will have rights or a legitimate interest in a corresponding domain name“. It is, however, not enough to establish a respondent’s absence of legitimate interests, rights, or bad faith for a domain name that contains a dictionary word or expression. Thus, the expert considered that although the use of a domain name for a pay-per-click link page is generally not considered to generate rights or legitimate interests, this may be the case when the domain name consists of a dictionary word and is associated in connection with that word. This is because dictionary words often have multiple meanings and can be used to describe a variety of products or services. Thus, the use of a domain name that contains a dictionary word or expression can be legitimate if it is used in connection with the word and is not used solely for the purpose of driving traffic to a pay-per-click link page.

Nevertheless, the Panel decided not to rule on the issue of rights and legitimate interests in light of its observations of bad faith. The Panel notes that the Complainant has not provided any evidence of its reputation or activity in Australia when registering the domain name in 2006. As a result of this decision, it is worth recalling that the UDRP procedure provides that these criteria are cumulative, whereas the UDRP procedure stipulates that registration or use in bad faith is sufficient. The expert’s decision is logical: trademarks should not prevent the use of a term in its descriptive sense. The expert’s solution is thought-provoking and logic leads one to wonder whether his position might have been different if one of the pay-per-click tabs displayed links related to dairy products. Finally, in view of the elements of the file, B.S.A. should have known that its complaint had almost no chance of succeeding. This is especially since the name is old and there is no evidence that B.S.A received a sales proposal from the defendant.

The UDRP is not a suitable forum for resolving cases of possible defamation

This dispute reflects the conflict of thought in today’s societies regarding the support of minors on gender. This decision, released on December 12, 2022, reminds individuals to keep several key conditions in mind when filing UDRP complaints for children and adolescents, such as the UDRP complaint filed by the Little Mermaid Observatory of Ideological Discourses on Children and Adolescents. 

The company “Little Mermaid Observatory of Ideological Discourses on Children and Adolescents” presents itself as an association aiming to “identify any element related to ideologies concerning children and adolescents” and “preserve children and adolescents from the dangers and consequences pertaining to discourses concerning them”. The association operates the website www.observatoirepetitesirene.org where it publishes articles related to gender dysphoria issues. The domain name <observatoirepetitesirene.org> has been registered on March 2, 2021. However, it is not specified for how long it has been used. In support of his complaint, he asserts, on the one hand, his prior domain name, <observatoirepetitesirene.org> and, on the other hand, his French trademark application “OBSERVATOIRE LA PETITE SIRENE” filed on September 12, 2022, and published on October 7, 2022. The trademark was not yet registered at the time the complaint was filed. The Disputed Domain Name, <petitesirene.org>, on the other hand, was registered on June 4, 2022, by the co-president of the association OUTrans, which aims to support transgender people. This domain name refers to a website dealing with the applicant and alerting the association’s objectives. The Complainant argues that the Disputed Domain Name “constitutes a flagrant and intentional error in the spelling of its prior domain name”. However, the name is clearly not typo squatting, as it uses the words “the little mermaid” explicitly and without error. Firstly, “in view of the dates of filing and publication of the trademark application asserted by the Petitioner, taking into account the minimum duration of the procedure before the INPI, even supposing that the trademark application succeeds in being registered, this registration cannot materially take place before the expiration of the deadline in which the Administrative Commission is required to give its decision“. Thus, the Expert also notes that the sign “OBSERVATOIRE LA PETITE SIRENE” cannot confer any rights under a possible trademark, because it is not used in business. The first condition of the UDRP principles cannot, therefore, be fulfilled. In addition, the expert agrees with the defendant’s argument that the expression “the little mermaid” is used allegorically in gender identity questioning. It could therefore not be excluded that the Respondent has a legitimate interest in the domain name.

Following, the Complainant considers itself defame by the Respondent’s comments. The Complainant also argues that the sole purpose of the Disputed Domain Name is to criticize the association, damage its reputation, and cause confusion among consumers. However, if the Respondent openly criticizes the Complainant via the domain name, confusion seems difficult. In addition, the complainant refers to filing a criminal complaint in the French courts against the Respondent for defamation. In response, the Respondent argues that the Complainant has not provided evidence of its ownership of the <observatoirepetitesirene.org> domain name, but more importantly raises a major argument that the disputed trademark is merely filed and not registered, so that the first condition of the UDRP, which requires the identity or similarity of the domain name to a trademark in which the Complainant has rights, cannot be met. In order to motivate the Respondent’s decision, the Panelist recalls that under paragraph 18 of the Rules of Procedure, it is up to the Respondent to decide, in a discretionary manner, to suspend or terminate the administrative proceeding when the Disputed Domain Name is already the subject of a legal proceeding. In this case, it is unclear whether a criminal complaint has been filed. However, the Panelist points out that it is not up to the Complainant to substitute as the criminal judge in assessing whether the disputed site is defamatory or not. The Panel’s opinion is based on the fact that the Respondent has used the domain name in good faith or in bad faith. The Panel is not able to decide unless the Respondent has used the domain name in good faith. Nevertheless, beyond the issue of defamation, the complaint may be dismissed for other reasons, that the expert raises.

Lastly, the Complainant’s position is that the term “petite sirene” is not a direct reference to the Observatory, but “a tribute to the Anglo-Saxon transgender movement that sees the character of the Little Mermaid in Andersen’s fairy tale as an allegory of trans-identity.” The Respondent claims a legitimate interest in the domain name. Moreover, the Respondent specifies that the disputed name is not commercially used. The Respondent argues that the site only has an informative vocation, falling within the freedom of expression. The Respondent indicates the use of the conditional tense on the site, by incorporating elements published in the press. Finally, the Respondent mentioned that the applicant had not proved criminal proceedings. Above all, the expert was not competent to rule on defamation.

In the end, in view of the considerations linked to the proper administration of justice and considering the general interest nature of the debate in question, the Panel declared itself incompetent in favor of the judicial judge and rejected the complaint lodged by the Complainant, without prejudice to the claims of the parties before the judge.