Dreyfus

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.

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…

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 27^th and the 28^th 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 28^th 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 !

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.

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 !

In a decision dated April 5, 2018 (no. 16-19655), the Court of Cassation, provided clarifications on the requirements for assessing the likelihood of confusion in the mind of the public where there is a conflict between a trademark and a company name.

The case was between, on the one hand, two companies, Capstone System Industry and Capstone Properties and, on the other hand, Capstone. Both parties operated in the field of real estate. Capstone had registered the semi-figurative trademarks “Capstone” and “Capstone l’immobilier neuf”, both of which were subjected to revocation actions by the two companies, on the ground that these trademarks violated their prior company name. The companies based their claim on article L711-4 of the French Intellectual Property Code, which provides that a sign may not be adopted as a trademark if it infringes on prior rights, including a company name.

Although the Court of Justice, in the case “Laguiole” of April 5, 2017 involving knives and cutlery, had already provided clarifications on the conflict between a prior company name and a trademark, these two jurisdictions do not approach the problem from the same angle although their visions appear complementary.  On the one hand, the Court of Justice recalled that the assessment of a likelihood of confusion must take into account the actual activity of the company claiming prior rights in a company name, and not the activities designated in the  statutes. This position had already been taken by the French courts, notably in the case “Coeur de Princesse” of July 10, 2012.  In that case, the Court of Cassation declared that “a company name is protected only for activities actually performed by the company and not for those listed in the statutes”. On the other hand, the 2018 decision delivered by the Court of Cassation gave the Court an opportunity to stand on the side of trademarks to provide additional clarifications on the assessment of the likelihood of confusion.  In such cases, only the goods and services covered by the trademark must be taken into consideration. In contrast, the trademark’s actual activity will not have any impact on the outcome of the dispute.  Thus, the Court of Cassation disagreed with the Court of Appeal for basing its decision on the actual activity performed by the holder and the conditions of use of the trademark.

Furthermore, this recent decision of the Court of Cassation reminds us that the likelihood of confusion must be assessed globally, based on the overall impression created by the invoked prior company names and the trademark. In this particular case, the Court of Cassation criticized the Court of Appeal for not stating the reasons why they discarded the term “Capstone” in the analysis of the likelihood of confusion.

Finally, the decision states that the elements unrelated to the invoked prior signs, for instance the logos, should not be taken into consideration. In the global assessment of the signs and the invoked prior company names, the Court of Cassation criticized the Court of Appeal for having relied on the clear difference between the calligraphic and graphic charter of the semi-figurative trademark “Capstone L’immobilier neuf” and Capstone Properties’ logo. By taking into consideration the logo chosen by the entity having the company name “Capstone Properties”, the Court of Appeal based its decision on an element foreign to the invoked prior signs. However, the Court should have only considered the company name in a strict sense – that is only considering the verbal elements.

Hence, this decision is instructive as it provides guidance on the Court’s stand as to when a company name is likely to constitute a right prior to a trademark.

The Court of Justice and the Court of Cassation have previously adopted a pragmatic and practical approach in the assessment of a likelihood of confusion when considering company names, by taking into account the actual activity of the company. In contrast, the Court of Cassation’s recent decision seems to take a more theoretical approach when it comes to trademarks. Indeed, the Court only retains the goods and services indicated in the trademark registration in order to determine the activity of the trademark owner. When it comes to the trademark, the actual activity will then be left, as we understand it, to an action based on unfair competition. It is therefore important to pay close attention to the action that one undertakes and to rely on the adequate grounds.

In the Court of Cassation decision made on March 28, 2018 a special attention is given to serious negligence and responsibility of a victim of a bank fraud operation. According to the article L 133-18 of the French Monetary and Financial Code, “in the event of an unauthorized payment transaction reported by the payer (..), the payment service provider of the payer shall refund the payer the amount of the unauthorized operation immediately after becoming aware of the transaction or after having been informed (…), unless it has a good reason to suspect a fraud”.

To assess the responsibility of the bank as well as the account holder (victim of fraud), an assessment of three different sources of fraud is necessary:

1. In case where the credit card was intercepted when it was sent by the issuer to its legitimate holder;
2. In case where the fraudster used the credit card recovered as a result of a loss or theft;
3. In case where the credit card number was obtained by different fraud techniques and was then used for fraudulent payments, especially on the Internet.

In the first case, the bank would incur liability in the absence of sufficient security measures preventing interception of personal data. According to the Article L133-15 of the French Monetary and Financial Code: “the payment service provider who issues a payment instrument must ensure that the personalized security data (…) are not accessible to other persons authorized user to use this instrument ». In addition, under the Article 34 of the French Data Protection Act, the bank, as a controller, is required to provide all appropriate technical and organizational measures to effectively guarantee the security of bank data. Failure to comply with this obligation can now be penalized by fine of up to 4% of the global turnover of the establishment as of May 25, 2018, the date of implementation of the European regulation on personal data protection. In the second case, given the fact that the credit card was no longer in the possession of the holder and provided that the conditions under the Article L133-19 of the French Monetary and Financial Code are respected, a deductible of 50 euros is applied by the bank. In the third case, the credit card would normally remain in the possession of the cardholder.

Different cases of bank data fraud are:

– Cloning (or skimming): in this case, the bank data is captured using a camera or by means of a diversion of a numeric keypad.

– Hacking automated data systems, servers or networks: represents a fraudulent intrusion into computer systems.

– Phishing (or phishing): in this case, fraudsters recover personal data of a credit card holder mainly through unsolicited emails directing users to fraudulent web sites.

In the first two cases, the cardholder cannot be bound and liable because it is not in a serious negligence. Moreover, the bank data is collected without the cardholder’s knowledge. Thus, the bank must fully refund the amount debited especially when computer system hacking occurred due to a low security level of banking computer system. The case of phishing is more delicate because it represents a fraudulent collection of bank data directly from the customer and not through the bank. In this case, the bank is required to refund the amount debited, even if the cardholder has fallen into the trap (judgment n ° 15-18102 issued by the commercial chamber of the French Court of Cassation on January 18, 2017) unless the bank can demonstrate cardholder’s “serious negligence”. The question that arises is how to evaluate whether or not there was a “serious negligence” in personal banking data protection by a cardholder? It should be indicated that the cardholder has a contractual obligation to take all reasonable measures to preserve the security of their bank information. In addition, regarding the Articles L. 133-16 and L. 133-17 of the French Monetary and Financial Code, it is the responsibility of the user of payment service to take all reasonable measures to preserve the security of his or her personal data and inform promptly the payment service provider of any unauthorized use of payment method or related data. In the court decision from October 25 2017, the French Court of Cassation points out that the victim “could not have been aware of the fact that the email she had received was fraudulent and if, consequently, the fact of having communicated his name, his credit card number, the expiry date thereof and the cryptogram on the back of the card, as well as information relating to his account SFR allowing a third party to take note of the 3D Secure code did not characterize a breach by serious negligence of his obligations mentioned in the Article L. 133-16 of French the Monetary and Financial Code, the local court deprived its decision of legal basis “

However, the French Court of Cassation, in its decision dated from March 28, 2018 gives a wide scope to the term “customer negligence”. The French Court of Cassation decision can provide banks with opportunity to refuse the refund on fraudulent transactions by demonstrating the existence of indications that allow the customer detecting fraud such as a vigilant examination of the correspondent’s changing internet addresses, misspelled words in email messages, or any other indication of suspicion of fraud. The decision implies that a guarantee of a non-failing security of computer systems, would serve as a leeway for banks to refuse reimbursement of the amount acquired by fraud. In this respect, as stated in the court decision dated from March 28 2018, “a payment service with a security device was used for purchases on the internet by use, in addition to data relating to its bank card, a code sent directly to the customer on his mobile or landline phone, allowing the user to authenticate the payment using confidential data not found on the payment card itself, is at least presuming the failure to keep confidential payment instrument data and the gross negligence of its user in preserving the confidentiality of his personal data“.

In the era of the digital economy and the proliferation of online transactions, social engineering is considered to be a growing threat. The technique exploits the human factor, and is widely used in bank fraud. Thus, credit card holders must be more vigilant while keeping up-to-date with various social engineering techniques and the instructions given by their bank to avoid any serious negligence leading to reimbursement refusal.

Given the importance of the cybercrime issue, the Ministry of the Interior published a second report dedicated to cyber threats in May 2018. It is a comprehensive, in-depth overview of the cybercrime and the responses developed by the Ministry. This report includes three parts:

• Strategic Issues Related to Cyber Threats
• Uses, phenomena and perception of the threat
• The actions taken by the Ministry of the Interior to manage cyberthreats.

The first part of the report identifies strategic issues related to cybercrime from social, economic and, legal perspectives. On social level it deals with the use of the Internet for terrorist purposes (crowdsourcing of terrorist activities), the development of information and communication technologies such as discussion forums and crypto – currencies, illicit traffic on Darknets (deep web) through increased use of encryption and anonymization tools. The economic level concerns the development of the cybersecurity market as well as economic counter-interference. For example, cyber-attacks motivated by greed, sabotage, espionage or economic interference have startling financial and reputational implications for organizations.

In the section on the legal issues related to cyber threats, the report includes information on the following developments: the evolution of French legislation, the impact of the directives (NIS Directive) and European regulations (GDPR),the CJEU jurisprudence in fight against cyber threats (judgment of 21 December 2016), the work of the Council of Europe, the United Nations General Assembly and the G7 Group, as well as international cooperation, considering the international dimension of cybercrime.

In the second part of the report concerning uses and threat perception, three factors were mentioned, namely: vulnerability, social engineering and malware. Theses are three main vectors of attacks such as targeted attack and deep attacks, misappropriation and theft of data, denial of service (DoS), disfigurement and telephone attacks.

The Internet with its penetration rate of 87% in France and 54% worldwide was identified as the main mean (especially through smartphones, tablets, Internet connected objects and smart spaces) used for terrorism, scams, extortion, bank card fraud, online criminal markets, attacks on minors, counterfeit works of the mind and ultimately undermining democracy. The study based on data collected by the national police shows a global increase in Internet offences by30% compared to 2016; more than 60% of these offenses are online frauds.

In the third part of the report concerning the actions of the Ministry of the Interior, three main actions were considered: prevention and protection, investigation, and innovation. Prevention actions include targeting general public, promoting awareness in the economic world, increasing territorial economic intelligence and protecting the Ministry’s information systems. The protection can be ensured by using cyber insurance to mitigate risk. Cyber insurance become common in France, regardless the fact that the intangible assets cannot be insured yet in a standardized way.

The report includes investigation procedures that go beyond current practice of acknowledging the victims of cybercrime. It is proposed to implement specialized investigation services for cybercrime as well as training and cooperation in the domain of cyber security.

Six main areas of innovation action were identified in the report:

• Research and development (analytical & forensics tools as well as academic research project)
• Public-private partnership
• Digital transformation: better reporting,
• Cyber communication (Neo PN / GN project, Digital Brigade of the Gendarmerie, establishing network of regional cyber threats
• Crisis Communication: Population Alert and Information System (SAIP) and Emergency Management of Social Media (MSGU)), a better understanding of mass phenomena (Thésée Project, Perceval Project),
• Remediation through platforms – assistance to victims of cyber-maliciousness, digital identity.

In the era of the digital economy and the digital transformation, cybersecurity is a crucial issue for consumers (including minors) who adopted online purchasing and usage, for the private sector (banking and financial sector, as well as the healthcare sector) and for the public sector. The strategy of fighting against cyber threats must be everyone’s business. It is therefore necessary to expand collective power to prevent and fight against terrorism.

In order to be prepared for any outcomes, including a “no deal” Brexit (a scenario in which the UK leaves the EU without agreement)  the British government published on Thursday, August 16 a set of technical guidelines  outlining the risks of a “no deal” outcome.  The guidelines are intended to help businesses and individuals to get ready for the impact of a “no deal” scenario.

Although the 24 guidelines contain many topics, the government is planning to release 80 guidelines in total. Among other topics, the guidelines cover the issue of tobacco legislation.

 The EU Member States are subject to EU Directive 2014/40 / EU “Tobacco Products” which regulates the manufacturing, distribution and sale of tobacco products in the EU. In the event of a “no deal” Brexit, the “tobacco products” legislation will no longer be applicable in the United Kingdom. It will be replaced by a UK legislation, which would contain minor amendments to the existing UK domestic law introduced in 2016.

However, another related issue remains unclarified, namely the graphic photo warnings that appear on cigarette packets, since the EU owns the copyrights for the photo warnings currently in use.  In order to use copyrighted images, a copyrights owner’s permission is required.  The “Tobacco Products” Directive grants the right to use the images on cigarette packets to the Member States, which makes the image bank of more than 40 photos unavailable to non-Members. In case of a “no deal” scenario, new UK images for cigarette packets will have to be introduced. In its’ notice regarding labelling tobacco products, the UK government states just that – tobacco manufacturers need to ensure that new picture warnings appear on tobacco products after Exit Day.

The tobacco products notice outlines the course of action that will need to be taken in the event of a “no deal” scenario. In September the UK Government will publish more technical details of the new regulation and the picture warnings that will minimize the burden associated with introduction of modifications. New information about the images used in the tobacco picture warnings will therefore be available when the new legislation is passed.