A case of unfair competition may arise if a competitor registers the domain name of a company which it no longer uses. This is the case when the confusion was deliberately maintained by the competitor and if it causes prejudice to the former holder according to the Commercial division of the Cour de cassation on February 2, 2016 (Cass. com., 2 février 2016, n° 14-20.486, « Sté Les Vents du Nord c/ Sté Cuivres et bois »).
A company selling and restoring wind instruments which operated a store under the name, the logo and the trademark “Les Vents du Nord”, was the holder of the domain name ” lesventsdunord.fr “, a website under construction.
The company Cuivres et Bois, which was in the same business and which operated a nearby store, bought the domain name “lesventsdunord.com” the day after it settled back in the public domain.
Les Vents du Nord served a formal notice to Cuivres et Bois to stop using the sign “Les Vents du Nord” and to transfer the disputed domain name to its name.
The right to a domain name is not expressly recognized by the French Code of Intellectual Property. However, a domain name is a distinctive sign. To maintain this right, it is compulsory to pay a renewal fee to the registry, often via the registrar. The penalty for non-payment is the loss of the right of the sign.
Thus, Article 6.7 of the Naming policy of AFNIC provides that “once deleted, the domain name re-enters back into the public domain and can be registered by a new applicant”.
The effective operation of the “website under construction”
The mere registration of the domain name is not enough for its defense. Effective use is also required. It is then necessary that the website under that name be open and running. Established case law states that the protection of a domain name can only be acquired through its operation. (Cass. com., 13 December 2005, n° 04-10.143, « Locatour »).
Despite this, although the website still bears the words “website under construction” on its landing page and has limited operations, the French Supreme Court deemed, as did the appellate judges, that since the landing page included the company logo, address, telephone number, its schedules and the purpose of its activities and was inserted as a link on other websites, there existed an effective and public operation of the domain name “lesventsdunord.fr “.
Purchase of expired domain name: an obvious abuse of right
Confusion between the two companies is bound to arise in the eyes of the public if a competitor purchases the disputed domain name on the day after it settled back in the public domain Additionally, the Court noted that both companies practiced exactly the same highly specialized activities in nearby locations.
The High Court states that the acquisition of this domain name by Cuivres et bois allowed it to capture the clients of Les Vents du Nord, including through links which automatically redirect the user to the company’s website.
The French Supreme Court concludes that Cuivres et bois committed acts of unfair competition. The situation between the parties has in fact harmed the attractiveness of Les Vents du Nord’s website and led to it being downgraded by search engines. In addition, the reputation of the latter has been affected by the confusion maintained by Cuivres et bois and this decreased the attractiveness of the sign “Vents du Nord.”. The High court approves the Court of Appeal decision to have ordered Cuivres et bois to pay 15, 000 euros in damages, resulting from acts of unfair competition on its part.
There is little case law penalizing an abuse of a non-renewed domain name, which is why this judgment is important. It allows for a clarification of the circumstances under which the registration of a non-renewed domain name may or not be lawful. Furthermore, this judgment clarifies the concept of operation of a domain name, which has been given a wide interpretation in this particular decision.
On June 23rd, 2016, UK citizens will vote on whether or not to remain part of the European Union. In case of a Brexit, the United Kingdom will have to leave the European Union within the next two years.
Whilst we are currently witnessing a harmonization of European patents and trademarks, a Brexit would have a significant impact on intellectual property law in Europe. If ever there were to be a “Brexit”, both British and European intellectual property title holders would suffer alike.
What are the implications for trademark owners?
The new EU Regulation No 2015/2424 regarding Community trade marks, which entered into force on March 23rd this year, brought about certain amendments; in particular, it changed the term “Community trade mark” to “European Union trade mark”. The European Union trademark, the only one of its kind in existence for the protection or trademarks across 28 member States of the European Union, will be significantly affected if a Brexit were to occur. In fact, the Regulation will no longer have any legal effect in the United kingdom.
The current holders of European Union trademarks would lose their rights to a trademark in the United Kingdom. Entities wishing to register a European Union trademark would not benefit from the automatic protection of their trademark in the United Kingdom. Consequently, they would need to file two trademark applications: one for the European Union trademark before the EUIPO and a specific application in the United Kingdom before the IPO. An application therefore may be a domestic one but can also be made on the basis of an international trademark.
In order to appease potential case law divergence, Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trademark (CTM), imposed an obligation on each Member State to designate courts at both first and second instance who would have jurisdiction in cases of community trademark infringement. In the event of aBrexit, the European Union trademark courts in Britain would no longer have that jurisdiction.
What are the consequences for patents?
On the one hand, if Britain were to eventually leave the EU, the European patent with unitary effect would no longer apply to the United Kingdom given that one of the conditions of the effect, is to be a Member State.
Despite this, there are two possible scenarios for the Unified Patent Court (UPC) if the British vote in favor of a Brexit. The first, is the setting up of the UPC without the United Kingdom being part of it. The second and less likely scenario, is that the United Kingdom’s exit from the European Union in turn, prevents the implementation of the JUB.
For the UPC to be set up, the agreement signed by 25 countries had to be ratified by at least 13 countries and mandatorily by France, Germany and the United Kingdom. Italy would therefore replace the United Kingdom since it is the country with the highest number of valid European patents in 2012 after Germany, France and the United Kingdom. An addendum to the agreement will therefore be required. Even where the United Kingdom did leave the EU, it is unlikely that this would prevent the setting up of the UPC: rather, its entry into force would be simply delayed throughout the EU.
What are the consequences for trademark and patent licenses?
The jurisdiction covered by licenses for intellectual property rights will also be affected if the United Kingdom leaves the EU. This is an issue of contract interpretation. Parties should ensure that licenses still cover the same territory and thus include the United Kingdom. This also applies to co-existence or franchise agreements.
A change to the principle of the exhaustion of rights
Moreover, we must not forget that if the United Kingdom leaves the EU, the scope of the exhaustion rule would also be amended. According to the exhaustion doctrine, goods can freely move across the territory of the EU or the EEA after an initial trading in the market made by the rights holder or with his consent. Consequently, the owner of a trademark or patent would not be able to oppose the use of any patent or trademark for goods which have been traded for the first time in the EU or EEA with his consent. If the UK were to leave the EU as well as the EEA, trademark and patent owners could prohibit the export of UK goods to Europe and vice versa.
Transitional Mechanisms for European trademarks
In order to ensure the protection of existing EU trademarks, the implementation of transitional mechanisms is essential. In light of the uncertain legal consequences, certain companies will register trademarks both on a domestic and European level so as to ensure maximum protection.
At present, it is possible to convert the registration of a European trademark to a domestic one (Articles 112-114 of Council Regulation (EC) No 207/2009) but the above requires a reconsideration of the application process and payment of taxes.
Additional legal consequences
Other legal consequences, going beyond intellectual property can be expected.
By leaving the European Union, the United Kingdom would no longer have a representative in the European Parliament nor in the European Council, and there would no longer be a British judge in the Court of Justice of the European Union (CJEU). EU legislation and the CJEU’s cases would inevitably be affected by a Brexit.
Dreyfus & associés is proud to announce that founder, Nathalie Dreyfus has been named Trademark Attorney of the Year (France) by Lawyer Monthly’s Women in Law Awards 2016.
A full-page article covering her and her team’s expertise and active role in various international IP organisations and associations has been published online and can be viewed here.
Margot Frohlinger, Principal Director for Patent Law and Multilateral Affairs at the European Patent Office (EPO) has announced that the Unified Patent Court (UPC) could finally be operative in the spring of 2017.
The Agreement on the Unified Patent Court was signed by 25 Member States of the European Union on 19 February 2013. However, it needs to be ratified by at least 13 states, including France, Germany and the United Kingdom, to enter into force.
A Simplified Process
The advantage of the European patent with unitary effect is that only one application will have to be filed, leading to a single patent being obtained and thus to the payment of a single annual fee. This patent will initially be valid in thirteen countries before being applicable to all European Union countries.
The Unified Patent Court will have exclusive jurisdiction for litigation relating to European patents and European patents with unitary effect. It will be possible for the holders of European patents to opt-out for a transitional period (of up to seven years), thus allowing them to continue to benefit from the current system. This is subject to one condition: no action should have been brought before the unified court.
The UPC will comprise a Court of First Instance, composed of a central division (with seat in Paris and two sections in London and Munich) and local and regional divisions in each Member State as well as a Court of Appeal and a Registry.
Eight ratifications so far
So far, the agreement has been signed by France and eight other states. The ratification of Germany and the United Kingdom is still amiss. The United Kingdom is clearly committed to ratifying the agreement in the summer of 2016. The German parliament meanwhile could ratify the agreement at the end of 2016 according to Mrs Frohlinger. The European patent with unitary effect and the UPC could therefore be born in the spring of 2017.
Preservation of national sovereignty
The adoption of the European patent with unitary effect and the Unified Patent Court is a step forward in the harmonization process of intellectual property law.
Although the trend is towards growing harmonization, Member States will always retain some of their sovereignty. Indeed, the substantive law as well as the procedure relating to the European patent with unitary effect will be harmonized while all issues relating to ownership and taxation would still depend on national legislation.
“Brexit”: what will the consequences be for the UPC?
Should the UK decide to leave the European Union, this would not be without consequence since membership to the European Union is one of the requirements to be part of the UPC. If the English vote to leave the EU in June 2016, two scenarios are possible:
Either the European patent and the UPC will come into effect without the United Kingdom being included,
Or the UK’s exit from the EU will prevent the European patent with unitary effect and the UPC to come into effect.
Ms. Frohlinger assured that the consequences of a possible “Brexit” would not be as dramatic as that as because of the UK’s significant involvement in the development of the UPC, ratification of the agreement should not be a problem.
As for Benoit Battistelli, EPO President, he appears confident and considers that “we are now ready from a legal, technical and operational point of view, to issue unitary patents. The only remaining steps are the setting up of the unified patent court and the finalisation of the ratification process at national level”.
Following a notification from the Intellectual Property department of the Ministry of Science and Technology, the Lao People’s Democratic Republic establishes the filing of multi-class trademarks.
A trademark could not be filed in several classes until recently in Laos, such that it was required to file several different trademarks.
Extended protection across the Asian market
Laos finally adopted the multi-class filing system on 1 February 2016, in order to comply with the practice of most of the other countries.
It should be kept in mind that the multi-class system provides many advantages.
As such, this system particularly provides:
Declining rates with regards to the taxes of additional classes
Simplified management and administration of filing of trademarks
Reduced analysing period for the filing of trademarks
Easy follow-up and renewal procedures of trademarks
Through their membership to the multi-class system, worldwide trademark owners may extend their protection to the significant Asian market by means of simplified and inexpensive proceedings.
Dreyfus & associés can assist you in any filing procedure for trademark registration while ensuring the best enforcement strategy and protection of your rights.
The use of a trademark within a family of trademarks cannot be invoked as a basis for justifying the use of another trademark belonging to the same family.
The company Otech, registrant of the French trademarks “Micro Rain” and “Big Rain”, having been made aware of the use of the signs “Micro Rain” and “Big Rain”, has served a formal notice to the companies Ocmis and Irtec to cease the use of these signs. The latter companies have then brought an action against the company Otech for the forfeiture of its rights on its two French trademarks and all relating products, in accordance with Article L714-5 of the French Code of Intellectual Property (Code de la Propriété Intellectuelle) which provides that “The owner of a trademark who, without good reason, has not made genuine use of his trademark in connection with the products and services covered by the registration for an uninterrupted period of five years may see his trademark cancelled”.
The Court of Appeal of Pau (Cour d’Appel de Pau), in a decision of January 2014 (CA Pau, 31 January 2014, No. 14/439), declared the forfeiture of the rights of the company Otech on its French trademark “Micro Rain” for all the products for which it was registered.
The company Otech, considering that the genuine use of a trademark of the French territory can be established by the use of its varied form, itself registered as a trademark, as long as its initial distinctive character is not altered, filed an appeal with the French Supreme Court (Cour de Cassation). Indeed, the company Otech argued that the use of its trademark “Mini Rain”, which only differed from the contested trademark “Micro Rain” by elements which did not alter its distinctive character, stood as evidence of the use of the said trademark “Micro Rain”.
Confirmation of appeal decision declaring cancellation
The French Supreme Court (Cour de Cassation) was then faced with the question of whether the use of a trademark, in the particular context of a trademark family, justified the use of another trademark belonging to the same family.
The French Supreme Court (Cour de Cassation), in its decision of 19 January 2016, applying the principles set out by the Rintisch decision of the Court of Justice of the European Union, confirmed the judgement of the Court of Appeal of Pau (Cour d’Appel de Pau) regarding the decision to cancel the rights of the company Otech.
Application of the European case law “Rintisch”
Indeed, the Court of Justice of the European Union, interpreting Article 10, paragraph 2, subsection a), of the Council directive 89/104/CEE of 21 December 1988 while reconciling the national laws of the Member States regarding trademarks, has emphasised that in the particular context of a family or series of trademarks, the use of a trademark cannot be invoked as a basis for justifying the use of another trademark (C-553/11, Rintisch, 25 October 2012, ground 29). It should be noted that this solution has not always prevailed and that the case law has often fluctuated on this matter.
In the judgement in question, the company Otech argued that the trademark « Micro Rain » belonged to a family of sixteen trademarks, all of them constructed around the term « Rain » used as a suffix or prefix. However, it could not, in order to avoid the cancellation of its rights over the trademark « Micro Rain », invoke the use of the trademark « Mini Rain », even if these trademark marques would belong to the same family or series. On this strict legal ground, the dismissal of the appeal is legally justified.
The cross-border nature of domain names raises the issue of the determination of the jurisdictionally competent court in cases of infringements caused by the registration or use of these signs.
How to appreciate the destination of a website? Use of the circumstantial leads method
According to the theory about the focalisation, the French judge is competent where the website in question is targeted to the French public, not merely when it is accessible from France (Com. 11 January 2005). This solution has been restated many times (Com. 29 March 2011; Com. 3 May 2012). The method takes into consideration several leads, such as the extension of the domain name, the language of the website or even the destination of deliveries. However, these criteria taken separately are not relevant.
This circumstantial leads method has been used by the Court of Justice of the European Union, in a decision of 12 July 2011, where it interpreted on a case-by-case basis several relevant leads in order to determine the target of a website.
Foreign ccTLDs and competent jurisdiction
However, the issue arises in case of foreign ccTLDs, which are national extension (<.ch> for China, <.de> for Germany, etc.). The determination of the target is therefore more complex, evidence as to the targeting of the French public must be set forth. In its judgment of 14 January 2016, the TGI (Tribunal de Grande Instance) of Paris held that an Italian website offering a French translation of its contents, as well as the contact details of one of its distributors located in France targeted a French public, with which it shared a significant and sufficient link. The court based its decision on Article 5-3 of the Community Regulation n° 4/2001 which provides that “A person residing on the jurisdiction of a Member State can be sued in another Member State : […] 3) Regarding unlawful or quasi-unlawful matters, before the local tribunal where the offence was committed or may be committed”. In the present case, the TGI (Tribunal de Grande Instance) of Paris is therefore competent in cases relating to the use of the trademark of a French company on a .it website.
A contrario, the Court of Appeal of Nancy (Cour d’Appel de Nancy), had, on 13 December 2010 refused to recognise the competence of French jurisdictions in a case concerning the website <carbone.nl> on the grounds that it was not in French language and did not offer products for sale in France.
It is therefore necessary to be careful and take into account all possible leads in order to identify the target of an Internet website, and thus the competent jurisdiction in case of dispute.
The Paris Court of Appeal (Cour d’appel de Paris), in its decision of 5 February 2016, held that the trademark Colink’In did not constitute an infringement to the trademark LinkedIn. The court sentenced the companies LinkedIn France and LinkedIn Ireland to pay 15 000 € to the company Colink’In in respect of its legal costs incurred. LinkedIn alleged an infringement by reproduction of the verbal and complex Community trademarks LinkedIn with regards to the filing, the registration and the use of the trademark CoLink’In, as well as the corporate name, trade name and the eponymous brand.
Trademark infringement’s appreciation: regarding the overall similarities
The Commercial Chamber of the French Supreme Court (Cour de cassation), by a decision of 25 March 2014, had previously had the opportunity to state the principle according to which an infringement should be construed with regards to overall similarities. The French Supreme Court (Cour de cassation) had stated the criteria for the determination of the infringement of a trademark in terms of a potential risk of confusion in the mind of the consumer. In this decision, the French Supreme Court (Cour de cassation) had restated the principle for the general interpretation of the risk of confusion and outlined: with regards to intellectual property, any infringement is construed from overall similarities and not from small differences (Cass. Com., 4 Jan 1982, Ann. propr. ind., p.244).
Furthermore, the Court of Justice of the European Communities, which had set its case law through three fundamental decisions, held that the infringement of a trademark is construed with regards to the overall idea given by a brand sign (CJCE, 11 Nov. 1997, aff. C-251/95, Sabel ; 29 Sept. 1998, aff. Canon ; 22 June 1999, aff. C-342/97, Lloyd). Therefore, not only should the trial judges set out the differences, but they must also find out whether the existing similarities do not create a risk of confusion.
In the present case, the Paris Court of Appeal (Cour d’appel de Paris) held that a consumer could not mistake the nature of the products and services offered by each party, after having analysed the construction, pronunciation and perception of the opposed brand signs. The pronunciation of the term Linkedin did not lead to a risk of confusion between the two brand signs and phonetical similarities seemed trivial. Indeed, in France “it cannot be certain whether the targeted public would pronounce the said trademark as Lin[k]din instead of Link[eu]din or Link[é]din”.
Finally, while the court concedes that LinkedIn is a reputed trademark, it does not recognise, however, “that the contested brand sign had negatively affected the identity of the trademark resulting in a decline in its market value, nor that it caused any tarnishing or blurring”. It therefore rejected LinkedIn’s claims for damages on these grounds against the respondent company.
Today, the 8th of March, Dreyfus joins in the celebration of the extraordinary power and strength of women all over the world. Today, we recognize the women of the Dreyfus team, our colleagues, families and partners, and their outstanding dedication to the global community.
“This should bring reinforced legal protection not only to the users of Facebook, but also to those who use other online services for which general terms include similar stipulations”
Nathalie Dreyfus, Founder, Dreyfus
No user of the internet can avoid being bound by the general terms and conditions of social media. These conditions determine the rules of interaction between the provider and user of a service. As to social media, these provisions will provide for IP rights, the use of personal data, and the content created by users, among others.
By allowing access to the social media network, the user accepts all of the provisions of the general terms and conditions of use, without being able to negotiate them effectively.
Questions must be asked of the binding force of these rules. What about their validity under French law?
The judicial nature of social media terms and conditions
Terms and conditions are, first of all, a contract determining the rules of the game on the social media network. It forms the law of the parties on the platform, and in France, Article 1134 of the French Civil Code applies: “Agreements legally entered into operate as law for those who made them.”
The particular formal requirements of this type of contract, namely the fact that the terms and conditions are agreed upon online, does not challenge their validity. It is an online contract.
Finally, the terms and conditions are pre-formulated standard contracts in the sense that, in practice, they do not allow the user to negotiate the terms of the contract.
Therefore, the terms and conditions of social media are binding contracts. However, in practice, the questionable accessibility and lawfulness of the clauses in the terms and conditions of social media can raise issues about their binding force.
The reliability of terms and conditions
Terms and conditions are often criticised for being hard to understand. Indeed, in practice these conditions are often reproduced in documents other than the contract and it is not always easy to prove that the contracting party knew of and accepted them. The terms and conditions are deemed to be acknowledged and accepted only if a clause in the contract makes reference to them.
For certain conditions pertaining to the protection of personal data, the accessibility is even more tenuous because the policies or confidentiality requirements can be opened only by clicking on a link in the terms and conditions.
Hence, this system of clauses can be compared to a Russian doll: the opening of one condition leads to another, and so on.
Furthermore, the terms and conditions of social media are modified on a regular basis, but that does not necessarily mean that the users are expressly informed about these modifications.
Some social media say they will only bring modifications that they deem to be ‘substantial’ to the attention of users. Hence, the lack of access to the content of terms and conditions and the lack of transparency concerning their modification seem to breach the protective provisions of French consumer law.
The lawfulness of social media terms and conditions
This is an issue when it comes to the usage licence of intellectual property rights as well as to clauses pertaining to personal data.
Social media are not unaware of the contents posted by the user and terms and conditions secure a licence for the use of this content. The issue is on the validity, under French law, of these clauses that secure the licences for the use of this content.
A May 2012 judgement of the first instance court given in TFI v YouTube indicated that the licence found in the terms and conditions of YouTube is questionable under copyright law because the temporal and spatial limits of the free transfer are not specified.
In addition, with regards to the formal requirements and compulsory indications imposed by Article L 131-3 of the French Intellectual Property Code, the shortcomings in the identification of the rights that are the subject of the licence, or even of the comprehensive licences for future works, are questionable under copyright law yet nonetheless feature in the licences for the use of social media.
It therefore seems that the licences for the use of content are not in line with the statutory requirements of French law.
When it comes to personal data, terms and conditions are criticised for their lack of transparency on the use of personal data and its appropriation by social media.
Some clauses, including those that provide for the conservation of personal data of the user for an indeterminate period, or for a period exceeding the time required to process the operation, are deemed to be abusive.
The potential abusiveness of T&C clauses under French law
The clauses that are presented here create a significant imbalance between the rights and obligations of the parties. Hence, public and consumer associations regularly target these clauses that they term as ‘abusive’.
The commission in charge of dealing with abusive clauses, through an order issued in November 2014, recommended eliminating the various clauses that are found in social media terms and conditions.
This commission, which falls under the remit of the minister responsible for consumers, issues recommendations to eliminate or modify clauses that have, as their purpose or effect, the creation of a significant imbalance between the rights and obligations of the parties to the contract that is detrimental to the amateur or consumer.
The majority of these clauses are about the protection of privacy and personal data.
The commission recommends that clauses, having as object or effect, the clarity of the contract, the formation of the contract, intellectual property rights or even the modification of the terms and conditions, be removed from the contracts proposed by the providers of the social media.
The recommendations of the commission only serve as guidance. However, their impact should not be underestimated because they can be an implicit basis for the courts when they assess the abusive nature of a clause in a legal dispute.
In practice, until very recently, it was not possible to file class actions in France. The Hamon Law of March 2014, which introduced class actions for the first time in the Consumer Code, will undeniably give consumer associations the right to seek compensation for consumers who have, as common ground, social media that have breached their legal or contractual obligations.
The position of social media terms and conditions when it comes to conflicts of jurisdiction
The rules applicable to legal and jurisdictional disputes are in conflict with the terms and conditions of social media and are currently attracting the attention of French case law and authors.
In 2012, the Court of Appeal of Pau explained the scope of application of the terms and conditions in relation to an action against Facebook.
A user was contesting a clause in the terms and conditions that confers jurisdiction to courts in California.
The judges had ignored the application of Facebook terms and conditions, taking into consideration that they were written in English and that the font style made the text too difficult to read.
Given that the conditions imposed by Article 48 of the French Code of Civil Procedure, which is ‘loi de police’ (a mandatory rule with which compliance is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to the extent that they are applicable to any situation falling within their scope), had not been respected, the internet user could not have consented to a full awareness of the facts, and so the clause conferring jurisdiction was null and void.
This case therefore confirms that the parties to a contract can choose which courts will have jurisdiction but the choice of the parties can sometimes be contrary to the provisions of ‘lois de police’ that must necessarily apply.
More recently, an order of the High Court of Justice of Paris, issued at the outset of the trial, deemed the jurisdiction clause found in Facebook’s terms and conditions to be null and void after the judge found himself competent to decide on this plea in before commencement of the litigation, which concerned the abusive nature of the clause.
This reasoning differs from the one used three years earlier by the Court of Appeal of Pau.
Indeed, the court did not rely on the prohibition of the abusive clauses but relied on the fact that the jurisdiction clause is extremely hard to identify and unclear, especially since it was written in English at the time.
The debate here is on the concept of abusive clauses. This solution should bring reinforced legal protection not only to the users of Facebook, but also to those who use other online services for which general terms include similar stipulations.
Nevertheless, this solution applied does not solve all the practical difficulties faced by the users of social media who want to have their rights recognised before the French courts.
Indeed, in practice, many obstacles limit opportunities to go before a judge, such as the extreme dependence on social media users accepting the pre-formulated standard contracts of these platforms, or the low financial implications of these legal disputes, which are too insignificant to justify a long and costly trial.
One should however congratulate the French courts for standing up to the providers of social media and ensuring that the fundamental values of French law are enforced. IPPro
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Written by Dreyfus08/07/2016 
