The protection of a trademark is crucial for any business, including those in formation. However, the process of registering a trademark in the name and on behalf of a company still in the process of being formed raises complex legal questions, particularly regarding the adoption of acts and the ownership of rights. Recently, French case law has evolved towards simplifying the formalities required for these actions.

Legal context of companies in the process of being set up in France

Definition and legal framework

A company in the process of being set up is a legal entity that has not yet acquired its legal personality, which occurs upon registration in the French Trade Register (RCS). During this period, acts can be carried out by the founders in the name and on behalf of the future company. These acts can be adopted by the company once it is incorporated, in accordance with articles L. 210-6 and R. 210-6 of the French Commercial Code.

Procedures for reassumption of acts

Acts carried out on behalf of the company in the process of being set up can be reassumed in one of three ways:

  • By mentioning in the company’s statutes that a list of acts done on its behalf is annexed.
  • By granting a mandate to one of the partners to carry out specific acts.
  • By a decision of the company after its incorporation, expressly approving the acts that have been performed.

Trademark registration for a company in the process of being set up

Importance of early registration

Registering a trademark before the company is incorporated is crucial for securing the business name and preventing third parties from taking ownership of it. This registration is typically carried out by a founder acting on behalf of the company in formation.

Risks associated with lack of regularization

If, after the company’s incorporation, the trademark registration is not regularized, the company will not be considered the owner of the trademark. As a result, it will be unable to take action against trademark infringement or defend its rights. Furthermore, the founder who made the registration will remain personally liable.

Recent jurisprudential evolution

French Supreme Court’s case law revision of November 29, 2023

In three rulings on November 29, 2023 (n°22-12.865, n°22-18.295, and n°22-21.623), the French Supreme Court relaxed the conditions for reassuming acts carried out on behalf of a company in formation. Previously, only acts explicitly stating that they were done “in the name” or “on behalf” of the company could be reassumed. The court has now allowed judges to consider the common intent of the parties, even in the absence of such explicit mentions.

Implications for companies in formation

This development simplifies the reassumption of acts and reduces the formalities previously required. Founders now have greater flexibility in managing acts performed prior to the company’s incorporation.

Case study: the French “PROPULSE” case

In a recent case, decision handed down by the Judicial Court of Lyon on October 1, 2024 (no. 24/01144), a trademark “PROPULSE” had been registered by an individual “acting on behalf of the company Submersive Drinks in formation.” After incorporation, no steps were taken to transfer the trademark to the company. When a trademark infringement action was filed, the court ruled that the company could not act since it was not the rightful owner of the trademark.

  1. Practical recommendations for entrepreneurs
  • Formalize the acts: while recent jurisprudence has relaxed requirements, it is still advisable to explicitly state that acts are carried out “in the name and on behalf of the company in formation.”
  • Annex the acts to the statutes: listing acts performed on behalf of the company in the company’s statutes makes it easier for them to be automatically reassumed after incorporation.
  • Follow post-incorporation formalities: after the company is incorporated, take the necessary steps to transfer the trademark ownership officially to the company, including filing a modification request with the INPI (French National Institute of Industrial Property).

Conclusion

Recent jurisprudential developments have simplified the formalities regarding acts carried out on behalf of a company in the process of being set up, particularly concerning trademark registration. However, entrepreneurs must remain vigilant to ensure their trademark rights are fully protected after incorporation.

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FAQ

 

1. What is the INPI?

The INPI (National Institute of Intellectual Property) is the French public body responsible for the registration and management of industrial property rights, such as trademarks, patents, and designs. It oversees the issuance of protection titles and the management of databases related to industrial property rights.

2. Can a trademark be registered in the name of a company that has not yet been registered?

Yes, a founder can register a trademark “in the name and on behalf of a company in the process of being formed”. This wording allows the company, once registered, to take over the rights to this trademark, provided that the regularization procedures are then carried out.

3. Who is the holder of the trademark before the company is registered?

Before registration, the applicant remains the legal holder of the trademark, even if he or she is acting on behalf of the company in formation. It is only after an explicit takeover (by statute or by decision) or a transfer that the company becomes the holder of the rights.