Dreyfus

Protecting intellectual property assets is a major concern of companies. Trademarks are a subject of immediate interest, because they allow consumers to associate products and/or services with a specific company. The company is therefore more easily recognized and is more likely to see customers buy its products.

Once a trademark has been duly registered, a company can start to exploit it.  That is when we must be most vigilant. Indeed, a trademark may lose its distinctiveness after its registration, by becoming a generic trademark.

What is a generic trademark?

Put simply, a generic trademark is one that has become “The common name in trade for a product or service” One of the main criteria for the validity of a trademark is its distinctiveness (Article L. 711-2 of the French Intellectual Property Code). Under the article L. 714-6 of the French Intellectual Property Code, a generic trademark is devoid of distinctiveness because it has become “The common name in trade for a product or service”.

In other words, a generic trademark is a trademark that has become a common term for a type of product or service. It is used by both consumers and competitors of the trademark to refer to the product or service no matter by whom it has been provided. As a victim of its success, the trademark no longer enables consumers to identify products and services as coming from the company concerned. It falls therefore into the public domain.

As such, the company that created the trademark loses its exclusive right of exploitation. It will no longer be able to oppose the use of its trademark by third parties who seek to use it as the descriptive or ‘generic’ name of the product or service for which it has become famous. This is called genericide of a trademark.

Under the aforementioned article L. 714-6, an action for revocation or cancellation for genericide of a trademark that became generic requires two conditions:

– the trademark must have become the common name of the product or service;

– such use must be caused by the trademark owner, namely mostly his inaction.

Hence, the need for a company to act effectively against any use of its trademark as a generic term. If the owner acts effectively against any generic use, the trademark will continue to be protected by law.

Good practices to prevent a trademark from becoming generic

Acting before any commercialization, is the most effective way to prevent a trademark from becoming generic. It is also advisable not to misuse the trademark later on.

If you have created a totally new product or seek to become a brand leader in a new market, it is imperative to create – or use -a term to designate the new product, as there is a strong risk of confusion between the trademark and the product. For example, Apple’s trademark is iPhone, and the product to which it is applied is a “smartphone”.  Similarly, if a generic term exists but is particularly complex, it is useful to provide a simpler term, where your trademark is the market leader. It is also recommended to use the term defined in this way in agreements with third parties (e.g. letter of commitment, coexistence agreement, etc.).

In addition, the trademark must be used correctly in all circumstances, both externally and internally.

The use of the trademark must be particularly monitored during advertising campaigns. The trademark should be distinguished from the surrounding text promoting the marketed product or service by placing it in BLOCK LETTERS or, by Capitalising the first letter.

Using the trademark as a noun makes it more likely to be confused as the generic name. This practice should be discarded in favour of using it as an adjective. For example; “a Kleenex handkerchief” rather than “a Kleenex”.

Another good practice is to use the ® symbol or the ™ symbol. Although the latter have no legal value in France unlike in the United States, their use on the market is common. Promoting the trademark as an asset belonging to the company discouraging its use as a common term.

A trademark becomes generic mainly because of its misuse by the public. This misuse is not necessarily the result of an intend to harm. As such, it is recommended to carry out advertising campaigns aimed at consumers promoting correct use in order to avoid misuse. Preparing written standards defining the correct use of the trademark that can be easily distributed to third parties (licensees, consumers, etc.) also participates to this public education.

Avoiding misuse of the trademark also requires protection against abusive use of the trademark by third parties. It is therefore necessary to monitor product and service descriptions for new trademark applications and press publications mentioning the trademark.

Finally, because a trademark may be declared generic as a result of the owner’s actions or lack of action, it is in the company’s best interest to ensure that it can prove that it has taken steps to avoid the trademark becoming generic. In this respect, marketing files (advertising costs, unsolicited mentions in the press, etc.), letters of formal notice, summonses or even court decisions are all evidence to be kept.

In short, a potentially generic trademark remains protectable under trademark law if its owner has enforced actions against its misuse and gathered supporting evidences to prove that extent.

Dreyfus can assist you in the management of your trademarks portfolios in all countries of the world. Do not hesitate to contact us.

On April 30, Spain finalized the reform of its trademark law, started in late 2018. From that date, the Royal Decree 306/2019 of 26 April 2019 amending the Regulations under Spanish Trademark Act 17/2001 entered into force.

The possibility to request proof of use in defense in opposition proceedings is one of the main innovations introduced into Spanish law by the 2018 reform. The European Union already provides for such a means of defense in article 47 of the European Union Trademark Regulation (EUTR). Thus, this reform of Spanish law is part of the welcome European harmonization.

The Royal Decree 306/2019, under discussion, establishes how this new defense will be implemented.

Thus, from now on, proof of use may be required for all opposition proceedings filed since May 1, 2019.

This mean of defense can be invoked against Spanish trademarks and trade names and against international trademarks designating Spain. However, not all prior right can be contested. To be challenged, the prior trademark or trade name must have been registered for at least five years. The holder of such prior rights will then have the burden of proof of the actual exploitation of the rights claimed.

If the evidence provided is insufficient, then the opposition request will be rejected. The relevant prior right or the existence of a likelihood of confusion will not be taken into consideration for the resolution of the dispute.

In this respect, the documents provided as evidence must refer to the goods and/or services for which the prior right is registered. If the opposition is based on part of the goods and/or services, then the right holder must provide the proof of a genuine use only for those goods and/or services. The supporting evidences must establish the real and serious exploitation of the prior right. This exploitation is established when products and/or services are offered for sale and put into the market.

The documents communicated must indicate the place, date, extent and nature of the sign’s use. For example, that may be catalogues, brochures, invoices, labels, advertisements, etc. Items provided by third parties constitute concrete and independent evidence. As such, their probative value is higher than the value given by the prior trademark owner’s evidence.

According to the judgment “Société Roche Bobois Groupe v. Société Caravane” of 23 January 2019, n° 17-18693, the French Cour de cassation held that a sign used to reference a piece of furniture may constitute a trademark infringement. In the present case, Roche Bobois had marketed sofas referenced as “Karawan”. Caravane, considering this exploitation damaging, sued Roche Bobois for infringement of its “Caravane” trademarks (both French and international).

Asserting that the use of a sign as a reference is common in the furniture sector, Roche Bobois claimed that the consumer was not likely to think that the sign “Karawan” was an indicator or origin of the products and is therefore not used as a trademark. Thus, Roche Bobois claimed that there was no infringement of the trademark “Caravane”. In its decision, the French Cour de Cassation ruled in favor of Caravane. The Court states that “the presence of the trademark “Roche Bobois” and the marketing of the products in a store dedicated to this trademark were not such as to remove the function of the disputed sign as an indicator of origin”.

The French Cour de Cassation  applied article L. 713-3 b) of the French Intellectual Property Code, which prohibits “The imitation of a mark and the use of an imitated mark for goods or services that are identical or similar to those designated in the registration.”

As such, Roche Bobois was counterfeiting. Indeed, the Court held that the sign “Karawan” was not solely used as a sign to reference but as a trademark. Relying on different indicators, the Court found that the sign was used as trademark. Indeed, the sign “Karawan” was not only written in large letters and clearly displayed on advertising posters but the trademark “Roche Bobois” was not clearly visible to the customer (at the bottom of the advertising posters, in small characters, etc.). Furthermore, a Google search combining the terms “sofas” and “Karawan” led to products of Roche Bobois. The sign was therefore not used for referencing purposes but solely for distinguishing and individualizing products as being those of Roche Bobois. Then, there was a risk of confusion in the minds of the public between the trademark “Caravan” and the designation “Karawan”. As a consequence, the use of the sign “Karawan” by Roche Bobois infringed the “Caravan” trademark.

The use of a sign as a reference is common practice in the furniture sector, but the decision of the French Cour de Cassation requires companies resorting to this practice to be more careful in the choice and the use of a sign as a reference. It is essential to avoid any risk of confusion in the minds of the public. The trademark associated with the marketed product must therefore be clearly visible and distinct of the sign used to reference.

Our study of the draft orders transposing the Directive (EU) 2015/2436 of the European Parliament and of the Council of December 16, 2015, leads us today to examine the invalidity action. The owner of an earlier mark who is instituting invalidity proceedings may now be opposed by the defendant non-use of the earlier mark. In addition, the invalidity action becomes imprescriptible.

Non-use is a defense in invalidity proceedings

As French law currently stands, a trademark cannot be registered if it consists of:

• a sign which cannot be represented graphically (Article L. 711-1);
• a sign devoid of distinctive character (Article L. 711-2);
• a sign which is contrary to public policy or morality (article L. 711-3);
• or a sign infringing an prior right (Article L. 711-4).

Only the graphical representation requirement is removed by the draft orders. The other conditions of validity of a mark are still grounds for invalidity proceedings. The owner of prior rights may request the invalidation a trademark infringing his rights, while the public prosecutor may request it pursuant to all the other conditions of validity (Article L. 714-3). The owner of a well-known trademark may also initiate invalidity proceedings against a trademark registered subsequently to his own (Article L. 714-4).

The French draft orders introduce the possibility to raise as a defense in invalidity proceedings the non-use of the prior trademark. In other words, the owner of a challenged mark may argue in defense that the earlier mark has not been used seriously for an uninterrupted period of five years. The plaintiff must provide proof of this serious use. Thereupon, there are two scenarios under the new Article L. 716-2-3.

• If the earlier trademark has been registered for more than five years prior to the date of the institution of the invalidity proceedings, but less than five years before the filing of the later trademark: the owner of the mark thus challenged must provide proof of serious use during the five years preceding his application or provide adequate reasons for this non-use;
• If the earlier trademark has been registered for more than five years at the time that the later trademark is filed: the owner of the mark thus challenged will have to provide proof of serious use for the five years preceding the filing of the prior trademark and during the five years preceding his application. Here again, only adequate reasons for its non-use will be able to excuse lack of serious use.

Invalidity proceedings become imprescriptible

Invalidity proceedings are currently subject to the ordinary law prescription provided by article 2224 of the French Civil Code, namely “five years from the day the holder of a right knew or should have known the facts enabling him to exercise his right”. Article L. 714-3 of the French Intellectual Property Code furthermore states that a trademark owner cannot institute invalidity proceedings if the contested trademark “was filed in good faith and if he had tolerated its use for five years”.

The French draft orders make invalidity proceedings imprescriptible in a new Article L. 716-2-6. Only well-known trademarks, within the meaning of Article 6bis of the Paris Convention, will remain subject to a statute of limitations of five years from the date of registration, unless the application has been made in bad faith (Article L. 716-2-7, new).

It can be argued that making invalidity proceedings imprescriptible weakens the rights of trademark owners because their rights can be challenged at any time..

The new measures put in place by the French draft orders transposing the “trademark reform package” must therefore encourage trademark owners to check with great care the validity of their sign before registering it as a trademark.

To be continued…