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Introduction

The valuation of intangible assets consists in identifying, organising and assessing the non-physical elements that contribute to the economic value of a business. The issue is straightforward: what has not been identified, protected and documented is difficult to value.

A serious valuation exercise therefore does not consist in arbitrarily assigning an attractive figure to an asset. It requires demonstrating that the asset exists, that it is duly owned by the company, that it is enforceable against third parties, that it has economic relevance, and that it is capable of generating or securing revenue.

Identifying intangible assets that can truly be valued

The first step consists in drawing up an inventory of the company’s intangible assets. Not all such assets are based on the same legal foundation, and not all are valued in the same manner.

Certain assets are protected by industrial property titles. This is the case for trademarks, patents and designs rights.

• A trademark may embody the company’s reputation, customer trust and commercial distinctiveness. Its value depends, in particular, on its distinctiveness, the territory in which it is protected, its reputation, its effective use and its ability to support a commercial strategy.
• A patent, for its part, may constitute a strategic asset where it protects a key technology, limits competitors’ market entry or enables revenue to be generated through licensing.
• Designs rights, in turn, may also constitute valuable assets where they protect the appearance of a product, its design, lines or aesthetic features, thereby contributing to its commercial appeal and differentiation on the market.

Other assets fall more within the scope of copyright, contract law or internal documentation. Software, applications, algorithms, interfaces, databases, graphic content and original creations may represent significant value, particularly in the technology and digital sectors. Their valuation nevertheless requires verification of ownership of the rights, especially where the creations have been produced by employees, freelancers, service providers or partners.

Finally, certain assets are not necessarily registered but may nevertheless be essential to the company’s business. Know-how and trade secrets, including internal methods, commercial data, protocols, formulas, pricing strategies and customer information, may constitute a decisive competitive advantage. Their value then depends on their confidential nature, their economic usefulness and the measures implemented to preserve their confidentiality.

Legally securing rights prior to any valuation

Prior to any valuation, intellectual property due diligence is essential. An investor, acquirer or partner does not merely value an idea, a technology or a trademark: they value an asset that the company can effectively exploit, defend and transfer.

This review must make it possible to answer several key questions. Is the company indeed the holder of the rights? Are the trademarks, patents, designs registered in the relevant territories? Do the employment, service provision or assignment agreements contain appropriate clauses? Do licences granted to third parties restrict the freedom to operate? Are trade secrets subject to sufficient protection measures?

This step is decisive. High-performing software developed without a valid agreement, a trademark used but not registered in the appropriate territories, or strategic know-how insufficiently protected may lose a substantial part of its value during due diligence.

Conversely, clear and comprehensive documentation strengthens the credibility of the valuation. It demonstrates that the company has control over its intangible assets and is able to derive a secure economic advantage from them.

Choosing an appropriate valuation method

Once the assets have been identified and secured, their valuation may be considered. There is no single method: the approach adopted depends on the nature of the asset, its stage of development, its exploitation, its market and the company’s strategy.

• The cost approach

This method consists in assessing the investments required to create, develop or replace the asset. It may take into account research and development expenditure, design costs, filing fees, professional fees, technical development costs and market launch costs.

This method is useful for recent assets or assets that are still only marginally exploited, but it has one limitation: the cost of creation does not always reflect the asset’s actual economic value. A costly patent may prove difficult to exploit, whereas a trademark created with limited resources may become highly profitable.

• The market approach

This method consists in valuing an intellectual property asset by comparing it with transactions involving similar assets, such as patent assignments, trademark licences, software valuations, franchise agreements or comparable transactions in the same sector. This method is based on the idea that the financial terms observed for a comparable asset may serve as a reference for assessing the value of the asset being valued.

The comparison must, however, be carried out with caution. The assets used as references must have similar characteristics, particularly with regard to the business sector, the territory concerned, the duration of the rights, the degree of exclusivity granted, the reputation of the asset, its stage of development and its commercial potential.

In practice, however, its application may be difficult, as the financial terms of licence or assignment agreements are often confidential.

• The income approach

This method consists in assessing the future income that the asset may generate or secure. It may include licensing royalties, cost savings, additional margins or commercial exclusivity. This method is often the most meaningful for investors, as it directly links the intangible asset to future economic performance. It nevertheless requires robust, documented and prudent assumptions.

In practice, these methods may be combined. The valuation must remain consistent with the legal, economic and commercial reality of the asset concerned.

Turning intangible assets into revenue

The valuation of intangible assets is not solely an accounting or financial exercise. It also makes it possible to structure their exploitation and turn them into sources of revenue.

• Licensing

A licence enables the company to retain ownership of the asset while authorising a third party to exploit it. It may be exclusive or non-exclusive, and may be limited to a territory, a duration, a sector or a category of products. Remuneration may take the form of a lump sum, royalties proportional to turnover, guaranteed minimums or a combination of these mechanisms.

• Assignment

An assignment, by contrast, enables the ownership of the asset to be transferred to a third party. It may generate immediate revenue but entails a loss of control. It should therefore be considered with caution, particularly where the asset concerned is central to the company’s strategy.

Other mechanisms may also be used to exploit the value of intangible assets. Co-branding may bring together two trademarks in order to create a joint offering. Franchising, for its part, is based on the structured provision of a set of intangible assets enabling the franchisee to reproduce a commercial concept, such as trademarks, know-how, commercial methods or distinctive signs, for example.

In all cases, valuation requires a rigorous contractual framework. An intangible asset creates lasting value only if the conditions governing its exploitation are clearly defined and legally secured.

Conclusion

The valuation of intangible assets is based on a progressive approach. It is first necessary to identify the assets that may be valued, then to secure their ownership and enforceability, before selecting an appropriate valuation method and considering their monetisation.

For an innovative company, this approach can make the difference between an asset that is difficult to defend and a genuine lever for growth, financing and negotiation.

Dreyfus law firm assists its clients in managing complex intellectual property cases, offering personalized advice and comprehensive operational support for the complete protection of intellectual property.

Dreyfus law firm works in partnership with a global network of attorneys specializing in intellectual property.

Nathalie Dreyfus with the support of the entire Dreyfus team.

Q&A

1. Can open-source components reduce the value of software?

They may do so depending on the licences used. Certain open-source licences impose specific obligations, particularly with respect to redistribution, attribution of authorship or making the source code available. Poor management of these licences may create legal risk and reduce the value of the software during due diligence.

2. Can the departure of an employee affect the value of an intangible asset?

Yes, particularly where key know-how or knowledge is not sufficiently documented or protected. If the asset depends solely on one individual, its value is more fragile. The company must therefore organise internal knowledge transfer, confidentiality and the preservation of essential elements.

3. How can an intangible asset be prevented from losing value over time?

Rights must be kept in force, titles renewed where necessary, unauthorised uses monitored, documentation updated, contracts adapted and the asset continuously exploited. An intangible asset that is not properly maintained may gradually lose both its legal and economic value.

4. Can an overvaluation be risky?

An excessive or insufficiently documented valuation may result in a loss of credibility with investors, acquirers or partners. It may also be challenged in the context of a financial transaction. The valuation must therefore remain prudent, justified and consistent with the available data.

5. Can intangible assets be used as collateral or as a financing lever?

In certain circumstances, yes. Some intangible assets may be taken into account in financing transactions, pledges or asset-structuring arrangements. However, their acceptance depends on their demonstrable value, legal certainty and potential liquidity.

The purpose of this publication is to provide general guidance to the public and to highlight certain issues. It is not intended to apply to particular situations or to constitute legal advice.

Introduction

Blockchain technology is gradually establishing itself within intellectual property litigation strategies. Tamper-proof timestamping, transaction traceability, immutable recording of a creation or prior use: the promises are compelling. Yet the probative value of such records remains conditional and subject to strict procedural requirements that neither technology nor enthusiasm can circumvent.

Blockchain: what the case law says

Under French law, civil evidence is unrestricted in principle: any means of proof is admissible, subject to the judge’s sovereign assessment of its probative weight. Blockchain is no exception: it is neither presumed reliable nor automatically disregarded.

1.1 Progressive recognition by the courts

The evidentiary value of blockchain is beginning to be recognised by French courts, particularly where the timestamp is corroborated by other evidence in the case file. The Marseille Judicial Court (1st Civil Chamber, case no. 23/00046) recently confirmed this in a judgment dated March 20, 2025, while stopping short of granting blockchain automatic evidentiary force.

For a detailed analysis of this decision, see our dedicated article: Is blockchain evidence recognised in copyright matters?

1.2 The applicable legal framework

French law has progressively recognised blockchain technology through the mechanism of the shared electronic recording device. Following an initial recognition of minibons by Ordinance no. 2016-520 of April 28, 2016, Ordinance no. 2017-1674 of December 8, 2017 admitted the inscription and transfer of certain financial securities on blockchain, a solution subsequently consolidated by the PACTE Act of May 22, 2019.

In the field of intellectual property, however, no specific legislative provision recognises autonomous probative value or constitutive effect for blockchain records. Blockchain essentially constitutes a timestamping and traceability tool whose probative value remains subject to the sovereign assessment of the judge.

Structural limitations

2.1 The oracle problem

This limitation, commonly referred to as the “oracle problem”, it admits that the immutability of blockchain does not, in itself, guarantee the reliability of the data recorded on it. If the information stored is inaccurate, falsified or misleading at source, its indelible nature confers no additional probative weight.

Accordingly, the registration of a hash at a given date establishes only that a file existed in that form at that precise moment. It does not demonstrate the originality of the content, the absence of prior rights, or that the person presenting themselves as author or rightholder is in fact the legitimate party. In other words, blockchain primarily demonstrates that content existed at a given date, without establishing, on its own, the ownership of the corresponding rights.

2.2 Enforceability against third parties

A prior right is enforceable against third parties only under the conditions provided for by the applicable legal provisions. However, blockchain does not replace official intellectual property registers. For rights that require registration, such as trademarks, designs or patents, only a formality completed with the INPI, the EUIPO or the competent office can give rise to the right or make it fully enforceable against third parties.

Accordingly, an on-chain record may demonstrate the existence of content at a given date but is insufficient, on its own, to establish an exclusive right enforceable against third parties. In litigation, the absence of a formal title or corroborating evidence may therefore substantially undermine the claimant’s case.

2.3 GDPR and blockchain

The use of blockchain raises significant compliance issues under the GDPR. The CNIL notes in particular that the immutability of data recorded on a blockchain may conflict with certain rights enshrined in the Regulation, most notably the right to erasure under Article 17 GDPR.

The recording of personal data on a public blockchain therefore carries significant risks, since the information stored cannot, in principle, be modified or deleted. Companies using blockchain in the management of their intangible assets must anticipate these constraints by adopting anonymisation mechanisms, data minimisation, or architectural solutions that limit the direct on-chain storage of personal data.

Blockchain and intellectual property: concrete use cases

3.1 Proving the anteriority of a creation

An author, designer or developer may record the hash of their source file on a blockchain prior to any public disclosure. This record, when combined for example with a bailiff’s report, provides a strong body of evidence to demonstrate prior creation in copyright litigation. It supplements, without replacing, the classical tools recommended by the INPI.

Practical example

« A graphic design studio records the digital fingerprint of its mock-ups on blockchain before presenting them to a client. Two years later, the client markets a product incorporating those elements. The blockchain record, submitted to the court together with an expert’s report, contributes to establishing anteriority and facilitates the infringement action »

3.2 NFTs and copyright: do not confuse token transfer with assignment

The transfer of a NFT does not automatically carry with it the assignment of the economic rights in the underlying work. The WIPO states this explicitly: the token evidences a transaction, not an assignment within the meaning of the French Intellectual Property Code. Under French law, any assignment must be express and delimited as to its subject matter, duration and territory (Art. L. 131-3 IPC). The valuation of digital assets must therefore be based on formally executed assignment agreements, not on blockchain records alone.

3.3 Commercial use of a trade mark: documenting through the chain

In revocation proceedings for non-use, the trade mark owner must demonstrate genuine use of their mark during the five years preceding the application. Authenticated screenshots, commercial transactions or licence agreements recorded on-chain may enrich the body of evidence required by the courts. This mechanism is usefully complemented by active portfolio surveillance to detect infringements.

How to strengthen the probative value of a blockchain record?

In practice, a blockchain record has real litigation value only if it forms part of a broader evidentiary strategy. Courts assess the reliability of this type of evidence in light of the circumstances of the case and the corroborating elements produced.

Several precautions can strengthen the credibility of an on-chain record:

• verify the integrity and traceability of the file whose digital fingerprint is recorded;
• prefer widely recognised and audited public blockchains;
• retain the technical elements associated with the transaction (hash, transaction identifier, timestamp certificate);
• supplement the blockchain record with traditional means of proof such as a judicial officer’s report, a deposit with an accredited trusted third party, or evidence of commercial exploitation.

Blockchain should therefore be viewed not as autonomous or self-sufficient proof, but as a tool that consolidates a body of circumstantial evidence.

Conclusion

Blockchain represents a genuine advance in the constitution of evidence in intellectual property matters. Its timestamping, traceability and immutability capabilities usefully reinforce litigation strategies and portfolio management. Nevertheless, its structural limitations serve as a reminder that legal rigour remains irreplaceable. Blockchain is an instrument in the service of proof: it must be designed, built and validated with the same care as any formal legal act.

Dreyfus law firm  assists its clients in managing complex intellectual property cases, offering personalized advice and comprehensive operational support for the complete protection of intellectual property.

Dreyfus law firm works in partnership with a global network of attorneys specializing in Intellectual Property.

Nathalie Dreyfus with the support of the entire Dreyfus team.

FAQ

1. What is a hash in blockchain?
A hash is a unique digital fingerprint generated from a file or piece of data. If the content is modified, even slightly, the hash changes automatically. It therefore makes it possible to verify the integrity of a document without revealing its content.

2. Why is blockchain described as “immutable”?
Once a transaction has been validated and recorded in the chain of blocks, it can no longer be modified without altering the entire chain, making it extremely difficult to falsify.

3. How is a transaction validated on a blockchain?
Transactions are validated through consensus mechanisms among network participants, such as Proof of Work or Proof of Stake, before being added to the chain.

4. Why is blockchain used as a timestamping tool?
Because it enables data to be recorded at a precise date in a durable and publicly verifiable manner, which may be useful for proving the existence of content at a given point in time.

5. Does a hash allow the content of the recorded file to be read?
No, the hash is a string of characters that represents the file in mathematical form, without making it possible to reconstruct or consult its content.

The purpose of this publication is to provide general guidance to the public and to highlight certain issues. It is not intended to apply to particular situations or to constitute legal advice.

Introduction

In practice, many companies believe that owning a trademark is sufficient to recover an identical domain name. The Sunshine case on domain names clearly contradicts this assumption. In its decision of June 9, 2009, the French Supreme Court (Cour de cassation) set clear limits: the transfer of a domain name can neither be automatic nor easily obtained through summary proceedings.

In a digital environment where domain names represent strategic assets, this decision requires companies to exercise heightened vigilance and to rethink their protection strategies. We provide here an in-depth analysis of this ruling and its practical implications for rights holders.

Legal background of the Sunshine case

The case reflects a common situation in practice, involving on one side a trademark owner, and on the other, a domain name holder.

In this case:

• A “Sunshine” trademark was registered in 2001 for clothing and footwear
• A third party registered the domain name sunshine.fr in 2005

Considering that this domain name infringed its rights, the trademark owner initiated summary proceedings to obtain its transfer.

By an order dated 13 July 2007, the Paris Tribunal de grande instance refused to order the transfer of the domain name sunshine.fr and also dismissed any claim of abuse in the proceedings.

The judge noted that the domain name had been registered in 2005 for the needs of a company that was indeed incorporated that same year, and above all prior to the entry into force of the decree of 6 February 2007.

He concluded that the alleged disturbance was not manifestly unlawful, which is an essential condition for summary proceedings. The claim was therefore dismissed, and the parties were referred to proceedings on the merits to resolve the issue of the likelihood of confusion with the trademark.

The Paris Court of Appeal ruled in its favour by applying the Decree of February 6, 2007, this text, which entered into force after the registration of the disputed domain name, now requires its holder to demonstrate either a right or a legitimate interest in holding that name.

Relying on this new regulatory requirement, the court found that the holder of the domain name sunshine.fr had failed to provide sufficient evidence of such a right or legitimate interest. It therefore concluded that maintaining the registration was unlawful and upheld the claim, thereby reflecting a strict interpretation of the new rules introduced by the decree. However, this analysis was subsequently overturned.

Prior to the entry into force of this decree, domain name allocation was primarily based on a technical approach governed by the “first come, first served” principle, with little control over prior rights.

Key legal principles established by the Sunshine case and domain names

The Sunshine decision of June 9, 2009, builds on existing case law by reiterating several well-established principles:

A fundamental rule: no retroactive application of the law

The French Supreme Court reaffirmed a core principle of French law under Article 2 of the Civil Code: a new law cannot undermine a situation that was lawfully established. In other words, a domain name that was properly registered before a new regulatory framework took effect cannot be challenged on the basis of that framework.

Trademark ownership does not grant automatic rights over a domain name

The Court of Cassation also notes in this ruling that simply holding a trademark does not automatically entitle one to recover a domain name and is not sufficient to establish infringement.

The Court also referred to Article R. 20-44-45 of the French Postal and Electronic Communications Code, which provides that the registration or renewal of a domain name may be challenged when it infringes third-party rights (notably a trademark), or the holder lacks a right or legitimate interest. A concrete, fact-based analysis is therefore required.

The decision imposes a particularly high evidentiary standard.

The ruling also requires that the a trademark owner seeking the transfer of a domain name must now demonstrate bad faith, either at the time of registration or during its use.

However, these points serve more as reminders of existing law than as genuine contributions

The central contribution of the decision: limiting recourse to summary proceedings

The main significance of the Sunshine decision lies in the French Supreme Court’s procedural analysis. Referring to Article 809 of the Code of Civil Procedure, the Court reiterates that a judge in summary proceedings may only order protective measures or measures to restore the status quo aimed at preventing imminent harm or putting an end to a manifestly unlawful disturbance.

However, the Court held that the transfer of a domain name cannot be classified as such a measure. Indeed, such a decision is not provisional in nature but produces definitive effects by altering ownership of the domain name. By ordering this transfer, the Court of Appeal had therefore exceeded the powers vested in it.

Through this decision, the French Supreme Court puts an end to a widespread practice consisting of using summary proceedings to quickly obtain the transfer of a domain name. It thus endorses a strict interpretation of the role of the summary judge, incompatible with measures that effectively resolve the dispute on the merits.

A reshaping of strategies in domain name disputes: towards faster and more efficient alternative routes

Before the Sunshine decision, recourse to summary proceedings was a common reflex. This procedural route made it possible to obtain decisions within relatively short timeframes, with immediate impact on the disputed situation. The possibility of securing a transfer through summary proceedings—even if debated—offered a significant strategic advantage.

The position adopted by the French Supreme Court in this decision has profoundly altered this balance. By excluding transfers from the scope of measures that may be ordered in summary proceedings, it deprives rights holders of a particularly effective procedural tool.

This shift has led practitioners to rethink their strategies. Judicial litigation remains available, but it is now primarily conducted through proceedings on the merits, which are longer and require a higher standard of proof. These actions, however, have the advantage of allowing for the award of damages, which extrajudicial procedures do not provide.

At the same time, there has been significant growth in the use of alternative dispute resolution mechanisms, such as:

• UDRP (international level),
• SYRELI (AFNIC) – for a better understanding of the strategic importance of the .fr domain in this context, see our dedicated article: Why .fr is becoming a key lever of digital sovereignty,
• ADR.

The 2025 Comprehensive Guide to Domain Name Disputes outlines all available avenues.

These mechanisms, specifically designed for domain name disputes, offer speed and efficiency well suited to the digital environment. In particular, they allow for the transfer of a domain name within relatively short timeframes, without the need to initiate full judicial proceedings.

Thus, the Sunshine decision has indirectly, yet decisively, encouraged the use of these specialized mechanisms.

Conclusion

The Sunshine case on domain name transfers requires a renewed understanding of the relationship between trademark law and the digital environment.

It establishes the primacy of prior registration, a reinforced requirement to prove good or bad faith and the need for a proactive and strategic approach

Rights holders must therefore anticipate and actively manage their digital assets.

Dreyfus & Associates assists its clients in managing complex intellectual property matters by providing tailored advice and comprehensive operational support to ensure the full protection of intellectual property rights.

Dreyfus Law Firm works in partnership with a global network of intellectual property attorneys.

Nathalie Dreyfus, with the assistance of the entire Dreyfus team.

Q&A

1. Why should domain names be registered at the same time as a trademark?
Because the “first come, first served” principle remains decisive. A domain name registered earlier even by a third party can be difficult to recover without proof of bad faith.

2. How does the Sunshine case impact trademark strategy?
It imposes a proactive approach. Trademark owners can no longer rely on recovering domain names after the fact and must secure their digital assets in advance.

3. Who bears the burden of proof in domain name disputes?
The burden of proof lies entirely with the claimant. The trademark owner must demonstrate both infringement and the domain holder’s bad faith.

4. What does good faith mean in domain name law?
It implies legitimate use, without any intention to unfairly benefit from another party’s reputation.

5. What best practices should be adopted to protect domain names?
Companies should implement a structured strategy: register strategic domain names (including variations and extensions) , monitor third-party registrations and centralize the management of their domain name portfolio

This publication is intended to provide general guidance and highlight certain legal issues. It is not intended to apply to specific situations or to constitute legal advice.

Introduction

Paying annual fees for plant variety rights is the very condition for the legal survival of protected varieties. A late payment, an unread notification, or a simple administrative oversight is now enough to turn a strategic intellectual property asset into a definitive forfeiture. The judgment delivered by the Court of Justice of the European Union on August 1, 2025 (Case C-426/24 P, Romagnoli Fratelli v. CPVO – Melrose variety) confirmed this without nuance: the right holder’s diligence is now elevated to a central obligation, and the digital communication carried out through the MyPVR platform entails significant procedural consequences. For breeders, seed companies, and agro-industrial groups, mastering the payment schedule, anticipating CPVO reminders, and implementing portfolio audits is no longer a matter of organisational comfort but of legal security.

The legal framework governing annual fees for plant variety rights

A plant variety right rests on a simple but demanding balance : in exchange for an exclusive exploitation monopoly conferred by Council Regulation (EC) No 2100/94, the holder must pay an annual maintenance fee. This payment is not a mere formality : it conditions the very existence of the title, in line with the same logic governing patents, trademarks, and designs.

Distinction between Community and national protection

At the European level, Community protection is administered by the Community Plant Variety Office (CPVO). Annual fees are set out in Commission Regulation (EC) No 1238/95 and collected pursuant to Article 9 of that text. At the national level, each Member State retains its own regime : in France, the French National Institute for Plant Variety Rights (INOV) administers plant variety certificates issued under the French Intellectual Property Code.

The legal nature of the annual fee

The annual fee, sometimes referred to as an annuity, is due from the date the right is granted and throughout its protection term, namely twenty-five years, extended to thirty years for vines, trees, and potatoes. Its amount typically increases over time, prompting the holder to weigh, on economic grounds, whether to maintain underexploited varieties. Failure to pay is sanctioned by cancellation of the title pursuant to Article 21(2)(c) of Regulation (EC) No 2100/94. It is then published in the Office’s Official Journal.

Payment schedule that the CPVO impose

The CPVO’s payment schedule is uncompromising and reflects an automated logic that no longer tolerates improvisation. Understanding its stages is the first condition of secure portfolio management.

Issuance of the debit note and the initial deadline

Each year, the CPVO sends the holder a debit note specifying the fee due, the payment deadline, and the reference of the title concerned. Since the exceptional measures adopted during the Covid-19 pandemic ended, the Office has reverted, as of 21 September 2020, to a strict regime : if payment is not received by the deadline, a reminder is issued, opening a new, and final, one-month period to settle the amount. This rule, expressly confirmed by the CPVO official communication, is the unavoidable benchmark for any portfolio manager.

The central role of the MyPVR platform

The MyPVR platform has become the official communication channel between the CPVO and right holders. Debit notes, reminders, procedural notifications: everything transits through the holder’s electronic space, accompanied by email alerts. The CJEU confirmed, in the Melrose judgment, that the President of the Office is empowered, under the basic Regulation, to impose this electronic mode of communication. Opting for MyPVR, or implicitly accepting it through use, therefore entails the full enforceability of notifications uploaded to the dedicated space.

The Court emphasises that it is for the holder to consult its MyPVR space regularly. Failing to open a message cannot be equated with absence of notification : the presumption of receipt applies as soon as the document is made available on the platform. This approach, assumed by the European judge, transforms regular consultation of MyPVR into duty for serious players in the seed sector.

Sanctions for non-payment in light of the Melrose case

The judgment Romagnoli Fratelli SpA v. CPVO delivered on August 1, 2025 by the CJEU is now the leading authority on forfeiture for non-payment. Its scope reaches well beyond the individual dispute : it redefines the diligence standards applicable to all holders of Community rights and serves as a key reference in current IP litigation before the European courts.

Economic and contractual consequences of non-payment

The loss of a plant variety right is never trivial : it produces cascading effects across the holder’s entire contractual and patrimonial ecosystem.

• Irreversible loss of the exploitation monopoly : the variety falls into the public domain and may be freely propagated and marketed by third parties.
• Collapse in the asset’s valuation : forfeiture directly impacts IP due diligence exercises during fundraising rounds, mergers and acquisitions, or licensing transactions.
• Disruption of intellectual property licensing agreements : royalties, warranties, and obligations toward licensees become weakened or extinguished.
• Potential internal liability of the team or service provider in charge of the portfolio, where economic damage can be demonstrated.
• Near-impossibility of refiling : the criteria of novelty and the DUS (distinctness, uniformity, stability) requirements are, in practice, no longer met once the variety has been commercially exploited.

How to prevent forfeiture through alerts and portfolio audits?

Faced with a now uncompromising framework, prevention is non-negotiable. A structured policy of alerts, audits, and internal governance neutralises the risk of forfeiture and sustainably secures the economic value of the variety portfolio.

Setting up an alert system

An effective alert system relies on several independent layers, ensuring that no single failure can cause the loss of the right. We advise our clients to combine the following pillars :

• Continuous updating of the email contact details registered with the CPVO, especially during reorganisations, departures, or changes of administrative contact.
• Internal deadline calendar integrated into a dedicated IP portfolio management software, with automated alerts at 90, 60, 30, and 7 days prior to each deadline.
• Backup oversight by a specialised intellectual property attorney.

Conducting a regular variety portfolio audit

The portfolio audit is a decisive management tool. Carried out annually or biannually, it enables the holder to map the entire set of titles, identify strategic varieties, question whether marginal varieties should be maintained, and rationalise annuity costs. It is also an opportunity to verify the accuracy of MyPVR contact details, test internal alert procedures, and integrate recent regulatory developments, chief among them the Melrose case law. Such audits play a role comparable to IP due diligence exercises conducted during corporate transactions, providing decision-makers with reliable visibility on the portfolio’s resilience.

Conclusion and strategic recommendations

Managing annual fees for plant variety rights is no longer a mere treasury matter : it has become a genuine test of organisational maturity. The Melrose judgment unequivocally confirmed the proactive responsibility of the right holder, endorsed the evidentiary force of MyPVR, and tightened the post-reminder window to one strict month. In a digital environment fully embraced by European institutions, vigilance has become the very condition for the durability of rights.

Dreyfus & Associés assists its clients in managing complex issues related to plant variety rights by offering tailored advice and comprehensive operational support for the implementation and optimization of protection strategies that incorporate all intellectual property tools (plant variety certificates, patents, trademarks, and know-how).

Dreyfus & Associés is partnered with a global network of Intellectual Property attorneys.

Nathalie Dreyfus with the support of the entire Dreyfus team.

Q&A

1. Is the CPVO required to verify that the holder has actually become aware of the reminder before declaring forfeiture ?
No. The CPVO system is based on the principle that notification is deemed effective as soon as it is made available on MyPVR. The Office is not required to prove that the holder has actually taken notice of it. This approach, endorsed by case law, places an increased duty of vigilance on the holder. In practice, failure to consult the platform does not constitute a valid excuse, except in duly proven exceptional circumstances.

2. Can restitutio in integrum still be used to recover a right lost for non-payment ?
Theoretically yes, on the basis of Article 80 of Regulation (EC) No 2100/94, but the Melrose ruling has drastically narrowed its scope. The holder must demonstrate an involuntary and exceptional impediment, unrelated to any negligence in consulting MyPVR or in updating its contact details.

3. Is engaging an attorney mandatory for the payment of annual fees ?
No, but it is strongly recommended. A specialised intellectual property attorney acts as an independent safety net, capable of monitoring MyPVR, anticipating deadlines, and reacting in the event of any technical or organisational issue affecting the holder.

4. Can an internal error (IT failure, staff absence, poor internal communication) justify restitutio in integrum ?
In principle, no. European case law adopts a strict approach : internal failures fall within the holder’s sphere of control and are generally considered negligence. To be admissible, the request must be based on an external, unforeseeable, and unavoidable impediment. This implies that companies must demonstrate the existence of robust internal procedures, including redundancy and control systems.

5. Can forfeiture for non-payment give rise to liability towards commercial partners ?
Yes, and the risk is far from theoretical. The loss of the right may constitute a breach of contractual obligations (warranty of quiet enjoyment, maintenance of the right in force, etc.). It may also trigger tort liability where partners (licensees, distributors) suffer damage. In practice, contracts often include liability or indemnification clauses that may be invoked.

This publication is intended to provide general guidance to the public and to highlight certain issues. It is not intended to apply to specific situations or to constitute legal advice.

Introduction

On 1 June 2025, the revised Regulations of the People’s Republic of China on the Protection of New Plant Varieties entered into force. Adopted in April 2025 by the Executive Meeting of the State Council, this text constitutes the first major revision since the promulgation of the original Regulations in 1997.

This reform reshapes the entire architecture of Chinese plant variety rights law by extending the scope of protection, introducing new mechanisms aligned with the international standards of the International Union for the Protection of New Varieties of Plants (“UPOV”), and substantially strengthening the enforcement tools available to right holders.

A Reform context driven by the growth of the seed industry

China’s seed industry has experienced spectacular growth over the past two decades, establishing itself as one of the key drivers of national food security. By the end of 2024, Chinese authorities had recorded more than 12,000 applications for plant variety protection, including nearly 6,000 grants. This exponential growth highlighted the shortcomings of the regulatory framework then in force.

The 2025 revision also forms part of an effort to align the Regulations with the Seed Law of the People’s Republic of China, as revised in 2021, several provisions of which had created inconsistencies with the 1997 Regulations. This is therefore a systemic reform designed to ensure consistency across the entire legislative and regulatory framework governing the protection of plant innovation in China.

Extension of the scope of protection: from propagating material to harvested products

The most significant development lies in the considerable broadening of the scope of protection. Until now, only propagating material seeds, cuttings and seedlings was covered. Harvested products fruits, flowers and grains now also fall within the scope of protection where they have been obtained from unauthorised material.

This extension addresses a practical issue: the distinction between propagating material and harvested products was frequently exploited by infringers who marketed harvested products directly without ever selling seeds, thereby evading enforcement action.

In addition, the list of acts requiring authorisation has been substantially expanded. Beyond production and sale, the Regulations now cover processing for propagation purposes, offering for sale, importation, exportation and storage.

Introduction of essentially derived varieties ( EDV) into chinese administrative law

This is one of the innovations most anticipated by the international breeder community. The system of essentially derived varieties (“EDVs”) has been incorporated into the Chinese regulatory framework for the first time. Under this regime, any commercial exploitation of a variety that is essentially derived from a protected variety requires the prior authorisation of the holder of the rights in the initial variety.

The determination of EDV status is based on a combination of molecular testing and phenotypic assessment, with the possibility of examining the breeding process in the event of a dispute.

In October 2025, the Supreme People’s Court of the PRC issued two leading judgments, No. 1201 and No. 44 of 2024, endorsing a comprehensive approach to varietal identification. The courts no longer confine themselves to isolated molecular analysis reports; they now assess all relevant constituent elements, including the identity of varietal denominations, similarity of key morphological traits and additional documentary evidence.

Reconsidering novelty: new grounds for loss of rights

The Regulations also introduce several new circumstances capable of affecting the novelty of a variety, a concept that is decisive for obtaining a protection title. These new grounds for loss of novelty are aligned with the 2021 Seed Law and warrant particular attention from applicants:

• the promotion of propagating or harvested material for more than one year in China before the filing date, or for more than four or six years abroad depending on the species;
  • official recognition that a variety has reached widespread cultivation, assessed on the basis of the cultivated area;
  • approval or registration of a crop variety for more than two years without any application for protection having been filed.

It should be emphasised that recent case law has introduced an important qualification in this respect. According to the Supreme People’s Court, judgment No. 891 of 2024, unauthorised dissemination by a third party cannot be attributed to the right holder and does not affect the novelty of the variety. This clarification is essential for breeders who fall victim to unlawful disclosures.

Compliance of denominations and prior rights: A strategic issue for applicants

The Regulations now impose a requirement of consistency in denominations throughout the life cycle of a variety: the application for protection, approval, registration, marketing and promotion must all use one and the same denomination. The Regulations expressly prohibit denominations that infringe third-party prior rights, including trademark rights.

This provision requires applicants to exercise increased diligence upstream. It is now essential to conduct a cross-clearance search covering both existing varieties and registered trademarks before filing, failing which the application may be rejected during preliminary examination.

In practice, any applicant must now carry out an in-depth search covering both previously registered plant variety denominations and third-party trademarks likely to give rise to confusion. Failure to do so exposes the applicant to rejection at the preliminary examination stage, with the resulting loss of time and resources.

An accelerated examination process and extended terms of protection

Reduction of the preliminary examination period

The Regulations reduce the preliminary examination period for protection applications from six months to three months, with a possible three-month extension for complex cases. This reduction is far from incidental: pursuant to Article 34 of the Regulations, the applicant may claim retroactive compensation for acts carried out between publication of the preliminary approval and grant of the final certificate.

Reducing this period therefore mechanically shortens the window of uncompensated exploitation and enables faster market entry in an economy where time-to-market is decisive.

Terms of protection harmonised with UPOV 1991

The term of protection has been increased to 25 years for trees and vines, as opposed to 20 years previously, and to 20 years for all other species, as opposed to 15 years previously. This extension aligns with Article 19 of the 1991 Act of the UPOV Convention, although China remains a signatory to the 1978 Act.

However, some uncertainty remains: the Regulations do not expressly state whether these new terms apply retroactively to rights already granted. The right holders concerned will therefore need to monitor future administrative guidance clarifying this point.

Strengthened administrative enforcement

The reform is not limited to the expansion of substantive rights; it also profoundly overhauls the administrative enforcement mechanism. Three structural developments deserve particular attention:

• First, sanctioning powers have been transferred from the provincial level to the county level, thereby bringing the competent authority closer to the field and promoting greater responsiveness to infringements.
• Secondly, the ceiling for administrative fines has been doubled: the maximum fine has increased from five to ten times the value of the infringing goods, together with a newly introduced minimum fine of RMB 10,000.
• Thirdly, administrative authorities have been granted extended investigative powers, including access to production premises, sampling, sealing and seizure of equipment and stocks. These prerogatives, previously reserved to the courts, give administrative authorities an unprecedented capacity to collect evidence.

Conclusion

China’s reform of the protection of new plant varieties marks a decisive turning point in the structuring of plant variety rights law in Asia.

By broadening the scope of protection, introducing the system of essentially derived varieties and equipping administrative authorities with genuine investigative powers, China is sending a strong signal to the international breeder community: the Chinese market now intends to offer a competitive and reliable legal environment for varietal innovation.

FAQ

1. Which plant varieties are protectable in China since the 2025 reform?
Since the revised Regulations entered into force on 1 June 2025, protection extends not only to traditional propagating material, such as seeds and seedlings, but also to harvested products such as fruits and flowers, provided that they have been obtained from unauthorised material. This considerably broadens the range of varieties and acts covered by protection.

2. What is an essentially derived variety under Chinese law?
An essentially derived variety is a variety which, while displaying distinctive characteristics, retains the essential genetic material of an initial protected variety. The 2025 Regulations now provide that the commercial exploitation of such a variety is subject to the authorisation of the holder of the rights in the initial variety. EDV qualification is based on molecular testing, phenotypic assessment and, where necessary, analysis of the breeding process.

3. How does the reform strengthen rights enforcement in the event of infringement?
The Regulations decentralise sanctioning powers to county-level authorities in order to allow faster responses in the field. The maximum fine has been increased to ten times the value of the goods at issue, with a newly introduced minimum fine of RMB 10,000. The authorities also have broader inspection powers, including the ability to conduct seizures and seal premises.

4. Does the 2025 reform apply to varieties already protected?
The question of the retroactive application of the new terms of protection remains open. The Regulations contain no express provision on this point. It is likely that only varieties for which the application is filed, or the title granted, after 1 June 2025 will benefit from the extended terms — 25 years for trees and vines, and 20 years for other species. Administrative clarification is expected.

5. What risks does an applicant incur if no prior search is carried out for the denomination of its variety?
Since the reform, varietal denominations must remain consistent across all procedures and must not encroach upon third-party prior rights, including registered trademarks. Failure to carry out a prior search exposes the applicant to rejection during preliminary examination, as well as to subsequent disputes with trademark holders. Such verification is therefore indispensable before any filing.

This publication is intended to provide general guidance to the public and to highlight certain issues. It is not intended to apply to specific circumstances or to constitute legal advice.

Introduction

The Implementing Regulation (EU) 2026/138 will become applicable as from July 1^st, 2026. This text completes the modernisation of European design law initiated by the substantive reforms that came into force on May 1^st, 2025.

Whereas the previous reform addressed the substantive provisions, this new text profoundly transforms the procedural rules governing the filing of design applications before the European Union Intellectual Property Office (EUIPO). This evolution responds to a need that practitioners have identified for several years: the inadequacy of graphic representation rules to current technological realities.

A structural procedural reform brought by the new Implementing Regulation on designs

The reform of European design law unfolded in two successive stages. Regulation (EU) 2024/2822, which became applicable on May 1^st, 2025, overhauled the substantive framework by redefining several key concepts. Several concepts have been redefined. In particular, the concept of “product” has notably been broadened to encompass digital creations, including interfaces, animations and graphic elements. Rights holders have also been granted the ability to take action against counterfeit goods merely transiting through the territory of the European Union. New exceptions to the rights conferred on holders have been introduced, new deadlines and fees have been established, and a repair clause has been provided for spare parts of complex products.

For further information on this reform, we invite you to read our article on the subject.

In a second stage, the Implementing Regulation 2026/138 adapts the procedural rules of filing to these new realities. This adjustment rests on a finding made by the European Commission: the evolution of visualisation technologies and the emergence of non-physical products require representation formats more sophisticated than those allowed under the previous framework. The Regulation thus implements two structural changes that should command the attention of applicants.

Without claiming to be exhaustive, the following developments focus on three significant contributions for applicants: the removal of the seven-view limit, the acceptance of new representation formats, and the easing of the regime governing multiple applications for designs.

The end of the seven-view limit: a decisive step forward in the representation of creations

• A constraint no longer suited to complex creations

Until the entry into force of the new Regulation, any application for the registration of a community design could not contain more than seven graphic or photographic representations per design filed. This constraint, relevant at the time it was adopted, had become a real impediment for applicants confronted with complex creations.

How to represent, in seven static views, an animated user interface comprising several successive states, an articulated product adopting different positions of use, or an object whose geometry can only be apprehended through a multiplicity of angles? Applicants were regularly compelled to make difficult trade-offs, sacrificing the clarity of certain features in favour of others deemed more important.

• A new freedom, framed by the requirement of consistency between representations

Regulation 2026/138 removes the previous strict limit of seven views. Applicants will henceforth enjoy an extended freedom to illustrate all the visual features being claimed. This evolution strengthens the legal certainty of the rightholder by enabling a more precise definition of the scope of protection.

A technical reservation nonetheless remains: it is likely that the EUIPO will maintain a technical ceiling within its online filing system, similar to the UKIPO approach of capping electronic filings at ten views. The precise terms will be set out in the Office’s forthcoming guidelines.

Above all, the Regulation specifies that the subject matter of the design claimed shall be determined by the combination of all the visual features resulting from all the representations filed. Perfect consistency between all views submitted thus becomes imperative, under penalty of objection from the examiner, or even loss of rights over certain distinctive elements.

The acceptance of new representation formats: videos, animations and CAD files

• Towards a dynamic and digital representation of creations

As a logical complement to the abolition of the seven-view limit, the new Regulation enshrines the acceptance of considerably broadened representation formats. Applicants may now file:

• static representations (drawings, photographs);
• dynamic and animated representations (videos, animated sequences);
• computer-generated images;
• computer-modelling files, in particular CAD (Computer-Aided Design) formats.

This evolution constitutes a decisive step forward for designers of animated graphical user interfaces, XR/VR environments and exclusively digital products, the protection of which fitted poorly within the static representations imposed until now.

• Heightened vigilance regarding the elements excluded from protection

The question of disclaimed features, traditionally indicated by dotted lines or shaded areas in two-dimensional views, remains to be clarified in the context of video files and 3D modelling. How is one to indicate, within an animated sequence, that a given element does not form part of the protection being claimed? Operational guidelines from the EUIPO are awaited on this point.

In this respect, recent case law, in particular the CJEU judgment in Ferrari of 28 October 2021 (C-123/20), reminds us that the scope of protection conferred by a community design depends closely on the precision with which its features are identified in the application for registration. The new formats offer, in this regard, fresh opportunities, but also fresh risks.

The easing of requirements for multiple applications

The reform also modifies the regime governing multiple applications for European Union designs. Until now, several designs could be included in a single application provided that the products concerned belonged to the same class of the Locarno Classification. This requirement could limit the practical value of multiple applications, particularly where the applicant wished to protect, in a single filing, a product range, accessories or variants falling within different categories.

As from 1 July 2026, this single-class requirement will be abolished. Applicants will therefore be able to include, in a single application, designs applied to products falling within different classes, which should facilitate the management of certain complex filings. This new flexibility will nevertheless remain subject to limits: a multiple application may not contain more than fifty designs.

This added flexibility will need to be factored into filing strategies. On the one hand, it will make it possible to streamline procedures, group together related creations and simplify the administrative management of portfolios. On the other hand, it will be accompanied by a change in the fee structure, with a flat fee for each additional design. In practice, multiple applications will therefore remain a useful tool, but they will need to be assessed on a case-by-case basis, depending on the number of designs to be protected, their commercial coherence and the overall cost of the operation.

Strategic levers to activate in order to take advantage of the new framework

• Deferring or anticipating filing: a case-by-case assessment

For creations whose representation would substantially benefit from the new formats, deferral of filing until July 1^st, 2026 deserves consideration. This strategy is particularly compelling for:

• animated graphical user interfaces (GUIs);
• articulated products or products with variable geometry;
• creations intended for XR/VR environments;
• digital objects whose form evolves through interaction.

Conversely, where establishing a priority date prior to July 1^st, 2026 is strategically necessary, typically in cases of imminent risk of disclosure by a third party, or where immediate enforcement is required, an intermediate solution warrants consideration: filing an initial application in still images and then claiming the priority of that filing in a new application made after July 1^st, 2026, exploiting the new formats.

• Auditing existing portfolios and adapting internal practices

Holders of existing design portfolios should identify those creations whose initial representation, constrained by the former rules, would benefit from new filings exploiting the now-permitted formats. Such a portfolio audit constitutes an essential prerequisite to any optimisation strategy.

Adapting internal processes is equally a key issue:  the process for preparing representations, involving the various stakeholders such as designers, marketing teams or industrial property advisors must be prepared to deliver the new formats required, in strict compliance with the requirement of consistency between representations. Failing this, the very richness of the available means of representation mechanically increases the risks of inconsistency, and consequently of objections during examination.

Conclusion

No single tool, taken in isolation, secures the optimisation of a post-reform community design filing. The abolition of the seven-view limit offers an unprecedented freedom, but the acceptance of video and CAD formats imposes heightened rigour as to the consistency of representations. The strategic deferral of filings beyond July 1^st, 2026 is justified only for certain creations and remains a matter to be balanced against the urgency of the competitive context. In practice, applicants who master their strategy will combine portfolio audit, representational engineering and temporal arbitrage.

Dreyfus law firm assists its clients in the management of complex intellectual property matters, providing tailored advice and comprehensive operational support for the full protection of intellectual property assets.

Dreyfus law firm works in partnership with a global network of lawyers specialised in intellectual property.

Dreyfus law firm with the support of the entire Dreyfus team.

Q&A

1. Can already-registered Community designs be supplemented with new views after July 1^st, 2026?

No. Implementing Regulation 2026/138 does not provide for any mechanism allowing the retroactive supplementation of representations for existing registrations.

2. What are the consequences for infringement actions pending on July 1^st, 2026?

Infringement actions brought on the basis of Community designs registered under the former regime continue to be assessed by reference to the representations actually filed.

3. Does a richer representation allow for broader protection?

Not necessarily. The addition of views, animations or digital formats should not be seen as a way to artificially broaden the scope of protection. These elements primarily serve to better identify the design being claimed. The more detailed the representation, the more it may also contribute to precisely defining the protected subject matter. The key issue is therefore to select formats that enhance the clarity of the filing without creating unnecessary limitations.

4. What is the principal risk associated with the use of multiple representation formats?

The main risk lies in inconsistencies between the different representations. The Regulation specifies that the protected subject matter is determined by the combination of all visual features. Any divergence between a photographic view, a video or a CAD file may give rise to an objection from the examiner, or even to a loss of rights over certain elements. Rigorous verification of inter-representation consistency is imperative prior to any filing.

5. How should design protection and copyright protection be articulated for a digital creation?

An animated graphical user interface or a digital object may benefit from dual protection: through design law (subject to novelty and individual character) and through copyright (subject to originality). For more information on this dual protection, you may refer to the following article.

This publication is intended to provide general guidance and to highlight certain issues. It is not designed to apply to specific situations and does not constitute legal advice.

Introduction

Over the past two decades, domain names have evolved into genuine intangible assets with autonomous economic value. The gradual saturation of the primary market has given rise to a structured, professional secondary market that is, for the best-informed actors, extremely lucrative. But how does domain name monetisation actually work? Which economic models exist? And which legal risks should be anticipated to secure these transactions?

From technical identifier to tradeable asset: understanding the value of a domain name

Originally, domain names were merely technical addresses designed to direct internet users to a website. It was the scarcity of available names, combined with the explosion of e-commerce, that triggered a profound transformation: certain domain names became rare and coveted assets, akin to plots of land in a commercial district.

1.1 Scarcity as a value driver

The primary market, direct registration through a registrar accredited by ICANN, can no longer meet the demand for short, generic and memorable names. With net registration growth of only 0.5% in 2024, the stock of attractive names is nearly exhausted. This structural scarcity stems from a fundamental property of the domain name system: a domain name is by nature unique.  For example, there can be only one holder of the name « assurance.com »; this technical feature automatically lends a special value to appealing generic names. Uniqueness is the first determinant of value: a domain name built around a highly sought-after generic keyword concentrates a value that does not depend on its holder’s activity, but on its intrinsic ability to generate organic traffic and commercial visibility.

1.2 Financialisation: from use to investment

This dynamic of scarcity has led to the emergence of speculative investment practices: « domainers » build and manage portfolios in the same way as alternative-asset investors, buying at low prices, increasing value, and reselling at a profit. Landmark transactions, such as ai.com sold for USD 70 million in 2026, illustrate the phenomenon. These figures reveal the maturity of a market in which the valuation of intangible assets follows rigorous economic criteria.

Monetisation models: resale, leasing and passive exploitation

Domain name monetisation is not limited to resale. Several economic models coexist, offering strategies tailored to each holder’s profile.

2.1 Resale on the secondary market

This is the most straightforward model. The holder permanently transfers the domain name to a buyer, who becomes the new registrant. Around 144,700 transactions were recorded in 2024, for a total value exceeding USD 185 million. Resale can take place privately, through a specialised broker, or via auctions organised on dedicated platforms such as Sedo or Afternic. Pricing depends on multiple factors: extension, length, generic nature of the term, traffic history, and absence of pending disputes.

2.2 Leasing and lease-to-own

The leasing model allows the holder to collect recurring revenue without parting with the asset. The tenant obtains a limited, non-exclusive and non-transferable right of use for a fixed term, subject to the conditions set by the holder. This mechanism protects the owner while opening access to premium domain names for operators who cannot or do not wish to bear the immediate cost of acquisition.

Lease-to-own is a hybrid variant: the user pays monthly instalments credited against an agreed sale price, with legal ownership remaining with the seller until full payment. This structure, comparable to a financial lease, suits high-value assets that are difficult to finance up front.

2.3 Parking and passive monetisation of traffic

A domain name not actively exploited can still generate passive revenue through parking: the page displays contextual advertising links whose clicks produce revenue shared with the platform. The model works best when the name generates direct natural traffic, without going through a search engine. Active monitoring of the domain name remains advisable, even in this case: uncontrolled advertising use may at any time infringe a third party’s rights.

The market ecosystem: specialised platforms and intermediaries

The secondary market is structured around an intermediation ecosystem that, like financial markets, provides liquidity, price formation and transaction security.

3.1 Mass-market platforms

Actors such as Sedo, Afternic and GoDaddy Auctions form part of the secondary-market infrastructure. They combine several formats, auctions, fixed price or brokerage, and expose names to millions of potential buyers. Their compensation is based on commissions of 10% to 30% depending on the sales channel.

3.2 Specialised brokerage for high-value transactions

Above a certain threshold, transactions go through specialised brokers who appraise the asset, conduct negotiations and structure the contract. Their involvement is all the more valuable as the legal qualification of domain names remains uncertain, making contractual drafting decisive for the buyer’s security.

The legal framework: between contractual freedom and structural uncertainty

Domain name monetisation operates in a hybrid and uncertain legal environment. Neither property law, nor contract law, nor intellectual property law alone governs domain name transactions, which generates a legal insecurity that practitioners must learn to manage.

4.1 The uncertain legal qualification of domain names

Under French law, « .fr » domain names are governed by the Code des postes et des communications électroniques (CPCE), which entrusts management of the registry to AFNIC and frames registration conditions according to public-interest requirements. In this framework, registration confers a right of use, not a right of ownership. French administrative case law has nevertheless recognised a patrimonial dimension to this right of use, where it can be valued and assigned (Conseil d’État, 7 December 2016, no. 369814, Société eBay).

By contrast, « .com » domain names fall under a largely privatised system, governed by ICANN and the accreditation contracts of registrars. U.S. case law has, in some decisions, recognised domain names as intangible property subject to ownership (Kremen v. Cohen, 337 F.3d 1024, 9th Cir. 2003). This asymmetry of protection depending on the extension must be anticipated in any international monetisation strategy.

4.2 The absence of automatic legal warranties in transfers

Unlike the assignment of a registered trademark, which benefits from a precise legal regime including warranty against eviction and publicity enforceable against third parties : the transfer of a domain name does not automatically generate equivalent legal warranties. The transferee enjoys no presumption of title; it bears the entire risk linked to the anteriority of potential third-party claims, in particular those based on pre-existing trademark rights.

This is why contractual practice has developed compensatory mechanisms: representations and warranties on the quality of title (no pending litigation, no infringement of third-party rights), indemnification clauses, technical-cooperation obligations and escrow mechanisms allowing the release of funds to be conditional on the effective completion of the transfer.

4.3 Risks linked to UDRP proceedings and trademark infringement

A domain name may at any time be the subject of UDRP proceedings initiated by the holder of a prior trademark. Administered by WIPO or other providers accredited by ICANN, these proceedings can lead to the forced transfer of the name if the registrant’s bad faith is established, including after the transaction, exposing the buyer to loss of the asset. In the most serious situations, a trademark-infringement action may be brought in parallel, with significant financial and reputational consequences.

Securing a domain name transaction: essential precautions

Faced with these risks, rigorous due diligence is essential regardless of the transaction value. The following are the points of vigilance we recommend.

5.1 Verifying the quality of title before any acquisition

• Verify the registrant’s identity and its consistency with the seller.
• Search for prior trademarks on the INPI, the EUIPO and international databases (prior-art searches).
• Check the domain name’s history (Wayback Machine-type tools, spam records, parking history).
• Verify the absence of pending or recent UDRP proceedings via WIPO

5.2 Structuring the assignment contract with precision

Representations and warranties: the seller certifies that it is the legitimate registrant, that it has effective technical control of the name, and that no third-party claim is pending or foreseeable.

• Technical-cooperation obligations: provision of the EPP/Auth code, unlocking of the name with the registrar, assistance within the agreed timeframes.
• Escrow clause: funds are held by a trusted third party and released only after confirmation of the effective transfer.
• Indemnification clause: the seller undertakes to indemnify the buyer for any loss arising from infringement of a third-party right pre-existing the transaction.

Conclusion

Domain name monetisation has established itself as a structured economic reality, driven by the scarcity of available assets and the growing maturity of market actors. The central issue remains the legal security of transactions: verification of prior rights, suitable contractual structuring, escrow mechanisms, and post-acquisition monitoring. In this field, technical mastery and legal rigour are inseparable.

Dreyfus law firm assists its clients in managing complex intellectual property cases, offering personalized advice and comprehensive operational support for the complete protection of intellectual property.

Dreyfus law firm works in partnership with a global network of attorneys specializing in Intellectual Property.

Nathalie Dreyfus with the support of the entire Dreyfus team.

Q&A

1. What is a premium domain name and how is it valued?
A premium domain name is a short, generic and memorable term combined with a popular extension such as « .com ». Its value lies in inbound natural traffic, SEO potential and market comparables. It is advisable to have it appraised by an expert.

2. Can a domain name be seized or recorded as a balance-sheet asset?
Yes, French case law recognises the patrimonial dimension of the right of use attached to a domain name (Conseil d’État, 2016, ebay.fr), allowing it to be recorded on the balance sheet as an intangible asset (IAS 38). Its seizability remains, however, more uncertain under French law than under U.S. law, which allows in rem actions directly against the name.

3. How can a recently acquired domain name be protected from UDRP recovery?
Protection begins before acquisition: a prior-trademark search is essential. Once the name is acquired, it must be used in good faith, without risk of confusion with a third-party sign. If proceedings are commenced, the assistance of counsel specialised in domain name disputes from the cease-and-desist stage onwards is decisive.

4. What is the difference between assigning a domain name and assigning a trademark?
Assigning a trademark transfers an intellectual property right enforceable against third parties, with legal warranties. Assigning a domain name transfers only a contractual right of use, whose strength depends entirely on the contract. The two assets are complementary: a strategic domain name should always be backed by a corresponding trademark.

5. Can the parking of a domain name constitute trademark infringement?
Yes, if the name reproduces a prior trademark and the parking page displays advertisements in the same business sector. This may amount to use of the sign in the course of trade and ground an infringement action or UDRP proceedings. Prior verification of third-party rights is therefore essential before any parking.

The purpose of this publication is to provide general guidance to the public and to highlight certain issues. It is not intended to apply to particular situations or to constitute legal advice.

Introduction

Is trademark law absolute? And how to protect yourself against exhaustion of rights? At first glance, trademark rights appear to grant their owner a comprehensive monopoly over the use and distribution of branded goods. However, in reality, this protection is fundamentally limited by the doctrine of exhaustion of rights, a cornerstone of intellectual property law that directly affects commercial strategies, distribution control, and international trade.

Trademark exhaustion: a structural limit to absolute rights

Trademark rights are often perceived as absolute because they allow their owner to prevent unauthorized use of a sign in the course of trade. Yet, this perception does not withstand legal scrutiny. The principle of exhaustion, as set out in Article L713-4 of the French Intellectual Property Code, introduces a clear limitation: the right holder may control the first commercialization of a product, but not its subsequent circulation once that initial sale has been authorized.

This principle ensures a necessary balance between intellectual property protection and the free movement of goods.

oncretely, once a product bearing a trademark has been sold by the owner or with their consent, that specific item may be resold without infringing trademark rights. This applies regardless of whether the resale occurs through traditional retail channels, online marketplaces, or secondary markets.

However, exhaustion is not a blanket waiver of rights.

– It applies strictly to individual items and does not extend to unsold stock or newly manufactured goods.
– It only concerns genuine products. Counterfeit goods or unauthorized reproductions remain fully subject to enforcement actions.
– Exhaustion does not affect other prerogatives of the trademark owner, particularly those relating to brand reputation, advertising, or unfair competition.

Why trademark law is not absolute in practice?

The non-absolute nature of trademark law becomes particularly evident when analyzing the economic rationale behind exhaustion. Intellectual property law is not designed to create perpetual control over goods, but rather to incentivize innovation while ensuring market efficiency. Once the trademark owner has benefited from the first sale, the law considers that its essential economic function has been fulfilled.

Nevertheless, trademark owners are not entirely deprived of protection after exhaustion occurs. The article L713-4 of the French Intellectual Property Code, consistently recognize that certain circumstances justify the reassertion of trademark rights, even after the first sale. This is particularly the case where the condition of the product has been altered, where the packaging has been modified in a way that may damage the brand’s image, or where the use of the trademark creates a misleading impression of commercial affiliation.

Parallel imports and the strategic importance of exhaustion regimes

This legal mechanism promotes market fluidity and consumer access, but it may also expose businesses to risks such as:
• parallel imports;
• price erosion;
• loss of control over distribution channels.

The legality of parallel imports namely, the importation of genuine products without the authorization of the rights holder depends directly on the applicable exhaustion regime.

Under national exhaustion systems, rights are exhausted only within the territory where the first sale occurred. Products placed on the market abroad therefore cannot be freely imported. By contrast, international exhaustion regimes allow the free movement of products once they have been first marketed, regardless of the country in which that first commercialization took place.

The European Union operates under a regional exhaustion regime, which permits the free movement of goods within the European Economic Area (EEA), but not beyond it. Since Brexit, the United Kingdom has adopted a specific regime known as “UK+”, characterized by an asymmetrical approach: products placed on the market in the EEA may be imported into the United Kingdom, whereas the reverse is not automatically permitted.

This situation entails major strategic consequences. It reduces the ability of UK rights holders to exercise control over imports, while preserving a higher level of protection within the EEA. Companies must therefore adapt their pricing strategies and distribution networks accordingly.

Burden of proof in matters of exhaustion: guidance from European law

In trademark litigation, the allocation of the burden of proof is a decisive issue in the application of the exhaustion doctrine. The case law of the Court of Justice of the European Union establishes a clear principle: as a general rule, it is for the reseller or importer facing infringement proceedings to demonstrate that the goods at issue were placed on the market within the European Economic Area (EEA) by the trademark proprietor or with its consent.

However, this principle is subject to an important qualification in the context of selective distribution networks. In such circumstances, the burden of proof may be reversed in favor of the reseller. It then falls upon the trademark proprietor to establish that the goods were not initially marketed within the EEA.

This exception aims to prevent rights holders from using selective distribution systems to artificially partition national markets and maintain price differentials within the European Union. In practice, it requires trademark proprietors to exercise increased vigilance in the management and traceability of their distribution channels.

By way of illustration, in a Dutch decision dated 16 April 2025 (Case No. C/09/646700 / HA ZA 23-379), the District Court of The Hague confirmed that where a rights holder is able to demonstrate that the goods originate from a market located outside the EEA, the doctrine of exhaustion cannot be relied upon. In the absence of evidence from the reseller establishing a subsequent lawful placing on the market within the EEA, the resale constitutes an infringement of trademark rights.

How to protect against exhaustion of trademark rights?

Faced with these constraints, companies must adopt a proactive and structured approach to managing exhaustion risks. For trademark owners, the priority lies in regaining indirect control where direct legal control is no longer available.
This begins with a precise understanding of applicable exhaustion regimes in each target market. Without this legal mapping, enforcement strategies risk being ineffective or even counterproductive. In parallel, companies should invest in supply chain traceability systems, enabling them to identify where and when products were first placed on the market. Such evidence is often decisive in litigation involving parallel imports.

Another essential lever is the implementation of selective or exclusive distribution networks, combined with contractual mechanisms that incentivize authorized sales channels. While these arrangements cannot override exhaustion, they can significantly reduce the attractiveness of unauthorized distribution.

From an operational perspective, the use of distinctive packaging, serial numbers, or geographic markers can help differentiate products intended for specific markets. This facilitates enforcement actions where goods are diverted in violation of contractual or territorial restrictions.

For resellers and parallel importers, risk management requires an equally rigorous approach. Operators must ensure that the goods they commercialize have been lawfully placed on the market within the relevant exhaustion zone. Particular caution is required where products are modified, repackaged, or combined with additional services. In such situations, it is essential to clearly inform consumers of the nature and origin of the intervention in order to avoid any suggestion of affiliation with the trademark owner.

Conclusion

Trademark law cannot be regarded as absolute. The doctrine of exhaustion introduces a necessary limitation, ensuring that once goods have been lawfully marketed, they may circulate freely under certain conditions. However, this limitation does not deprive trademark owners of all protection. On the contrary, it requires them to adopt more sophisticated, strategic, and evidence-based approaches to safeguard their rights.

In a globalized economy marked by complex distribution chains and price disparities, mastering the rules of exhaustion is no longer optional. It is a decisive factor in maintaining brand value, controlling market positioning, and preventing unauthorized commercial practices.

Dreyfus & Associés assists its clients in managing complex intellectual property cases, offering personalized advice and comprehensive operational support for the complete protection of intellectual property.

Dreyfus & Associés works in partnership with a global network of attorneys specializing in Intellectual Property.

Nathalie Dreyfus, with the support of the entire Dreyfus team

Q&A

1. Is the exhaustion of rights doctrine universal?
No. The application of exhaustion depends on the legal regime in force within each country or region. Some jurisdictions apply national exhaustion, others regional exhaustion, while certain systems recognize international exhaustion.

2. Can modification of a product prevent the application of exhaustion?
Yes. Exhaustion may not apply where modifications affect the quality, condition, or reputation of the trademarked product, or where they are likely to damage the brand image.

3. Can a trademark owner prohibit the resale of its products on certain online marketplaces?
In principle, the exhaustion doctrine limits the trademark owner’s ability to prohibit resale. However, restrictions may be justified in specific circumstances, particularly within selective distribution networks or where necessary to preserve the prestige and reputation of the trademark, provided such restrictions comply with competition law.

4. What is the difference between parallel imports and counterfeiting?
Parallel imports concern genuine goods that were initially placed on the market in another territory with the authorization of the rights holder and subsequently imported without its consent into the relevant market. Counterfeiting, by contrast, involves unauthorized goods that unlawfully reproduce or imitate the trademark. The applicable legal regimes and potential sanctions differ significantly.

5. Can contractual provisions circumvent the exhaustion doctrine?
Contractual arrangements may regulate distribution channels and commercial relationships, but they cannot override the exhaustion doctrine itself. Moreover, such clauses must comply with competition law and must not create unjustified restrictions on trade.

This publication is intended for general public guidance and to highlight issues. It is not intended to apply to specific circumstances or to constitute legal advice

Introduction

Contrary to a common misconception, U.S. case law on the use of artificial intelligence is not a reality reserved for Silicon Valley giants. It is a judicial laboratory whose lessons are likely to influence European practices, particularly in the areas of copyright, data confidentiality and governance of digital tools.

The dispute between The New York Times (“NYT”) and OpenAI is the pivotal case in this development. The NYT alleges that OpenAI trained its large language models (“LLMs”) on millions of protected articles without authorization.  Two discovery orders issued by U.S. Magistrate Judge Ona T. Wang have since laid down guiding principles that extend well beyond the press sector alone.

For French and European companies, the message is clear : if litigation arises tomorrow and your employees have entered sensitive data into a consumer-facing AI tool, those data may be compelled for production before a court.

What recent U.S decisions reveal about the discoverability of AI data

In this case, the NYT claims that OpenAI used its articles without authorization to train its AI models, which would also allegedly be capable of generating reproductions or near-reproductions of its content.

When AI logs resist discovery

In her first decision of September 19, 2025, Judge Wang rejected OpenAI and Microsoft’s request seeking production of the New York Times’ internal “ChatExplorer” logs, including the prompts entered by the newspaper’s employees and the responses generated. The defendants argued that these materials could demonstrate the existence of legitimate and non-infringing uses of AI models, particularly in a journalistic context.

The court nevertheless found that these logs were too remote from the core of the dispute. The fair use analysis had to focus on OpenAI’s use of the NYT’s copyrighted works to train its models, as well as on any reproductions generated by those models, and not on the internal use that the NYT itself made of an AI tool. Likewise, these logs did not genuinely make it possible to assess ChatGPT’s economic impact on the newspaper’s market : the NYT could not be considered its own competitor.

Finally, the request was held to be disproportionate. It would have required the review of more than 80,000 entries, potentially containing sensitive information or material covered by privilege, without their evidentiary value being sufficiently demonstrated. The decision therefore recalls that data generated by AI tools is not automatically discoverable : its production requires a direct link to the dispute and a proportionate review burden.

When AI logs become discoverable

The second decision, handed down on December 2, 2025, illustrates the other side of the reasoning. This time, it was no longer OpenAI seeking the NYT’s internal logs, but the New York Times requesting production of ChatGPT output logs generated by consumer users. The aim was to demonstrate that OpenAI’s models could reproduce the newspaper’s protected articles in response to certain prompts.

Judge Wang granted that request. Unlike the ChatExplorer logs, these logs were directly connected to the core of the dispute: they could help establish whether ChatGPT outputs actually reproduced protected NYT content. They were therefore relevant not only to assessing the existence of possible infringement, but also to OpenAI’s defences, including fair use and the existence of substantial non-infringing uses.

The court also held that the request was proportionate. The requested sample covered 20 million de-identified logs, representing less than 0.05% of the total volume retained by OpenAI. The measure was also framed by confidentiality safeguards and by a de-identification process that was already largely underway. This decision therefore shows that AI data may become discoverable when it goes directly to the merits of the dispute, is useful in proving the parties’ claims and defences, and its production remains technically and legally controlled.

The Heppner case : AI without a lawyer, illusory protection

In United States v. Heppner, a decision issued on February 17, 2026, Judge Rakoff refused to protect, under attorney-client privilege or the work product doctrine, documents generated by the defendant using Claude before any effective involvement by counsel.

The decision recalls that exchanges with an AI tool cannot be equated with confidential communications with legal counsel, and that documents prepared without an attorney’s direction or request do not, in principle, benefit from the protection afforded to defense preparatory work. The reasoning is further reinforced by the tool’s terms of use, which did not provide sufficient guarantees of confidentiality for the data entered.

This case therefore illustrates the risk, for a client, of sharing information related to litigation or a defense strategy with an AI tool on their own : in the absence of attorney supervision and confidentiality safeguards, such exchanges may become discoverable.

For a more in-depth analysis, you may refer to our previous article.

What concrete risks do companies and their counsel face ?

These decisions reveal systemic risks that any organization using AI must anticipate. Beyond U.S. procedure, mechanisms for compelled production of evidence also exist under French law, including référé probatoire and court-ordered production of documents, and the underlying principles may be transposed.

• Breach of trade secrets : strategic data entered into a consumer-facing AI tool may be stored, processed and potentially disclosed to third parties in accordance with the platform’s terms and conditions.
• Loss of professional secrecy protection : a lawyer who enters sensitive client data into a public AI tool that trains on user inputs risks entirely waiving the protection attached to professional secrecy.
• Preservation and production obligations : AI prompts and outputs constitute electronically stored information and are subject to the same obligations as emails. In the event of reasonably anticipated litigation, their deletion may amount to a serious procedural violation.
• Liability for hallucinated content : submitting nonexistent case law generated by an LLM to a court may trigger disciplinary and civil liability for the lawyer or counsel relying on it.
• Risk of infringement : AI outputs reproducing protected works without a licence may expose the user to liability for copyright infringement.

Essential measures to protect your clients’ data

The first step is to audit the AI tools being used, including informally, in order to identify risks relating to terms of use, confidentiality, data retention and their potential use for training purposes.

The organisation should then formalise an internal AI governance policy, regulating the data that may be entered, the retention of logs, preservation obligations in the event of litigation, and human review of generated outputs before any official use.

Finally, this policy should be accompanied by team training. Lawyers, executives and legal officers must understand the risks associated with AI, avoid producing inaccurate materials, and ensure clear, documented and effectively implemented governance.

European law to the rescue : GDPR, the AI Act and intellectual property

European law provides a complementary and more protective framework. In particular, the General Data Protection Regulation (“GDPR”) requires that any processing of personal data pursue a specific purpose and comply with the principles of data minimization, the right to erasure, and certain security measures. The use of a consumer-facing AI tool to process clients’ personal data, without a legal basis or impact assessment, may constitute a violation subject to sanctions by the CNIL.

The AI Act also strengthens requirements relating to transparency, traceability and human oversight, particularly for high-risk AI systems used in legal or decision-making contexts.

Finally, AI-generated content may infringe pre-existing intellectual property rights, such as copyright, trademarks, designs or patents. Since ownership of copyright in an AI-generated work remains uncertain under French law, any commercial exploitation must be subject to a rigorous prior assessment.

Conclusion

The U.S. decisions of 2025–2026 have crystallized a principle that European law had already expressed in another form : data entrusted to an AI tool do not disappear. They persist, they may be discoverable, and they may be used against their author if no governance framework has been put in place upstream.

The protection of  your data in an AI environment rests on three inseparable pillars : informed choice of tools, formalization of a binding internal policy, and continuous team training.

Dreyfus assists its clients in managing complex intellectual property matters by providing tailored advice and comprehensive operational support for the full protection of intellectual property.

Dreyfus & Associés works in partnership with a global network of lawyers specializing in intellectual property.

Nathalie Dreyfus, with the assistance of the entire Dreyfus team.

Q&A

1. Are conversations with ChatGPT or Claude confidential ?

By default, in consumer-facing versions, no. The terms and conditions of most AI platforms provide for the possibility of collecting inputs, using them to improve models and sharing them with third parties. Enterprise versions, whether API-based or professional subscriptions, generally offer guarantees that data will not be used for training purposes, but these guarantees must be verified contractually on a case-by-case basis.

2. Can a lawyer use AI without breaching professional secrecy ?

Yes, subject to strict conditions. The tool used must contractually guarantee the confidentiality of the data entered, no client-identifying data should be shared unless necessary, and any AI output must be independently verified before official use. The Heppner case shows that unregulated AI use can destroy the benefit of professional secrecy.

3. What data should never be entered into a consumer-facing AI tool ?

Any data that may be considered confidential or strategic : clients’ personal data within the meaning of the GDPR, information protected by trade secrets, data relating to ongoing or reasonably anticipated litigation, content covered by lawyers’ professional secrecy, and any information that may identify a party to a contract or proceeding.

4. Can AI outputs be protected by copyright ?

Under French law, copyright protection requires an original work of the mind bearing the imprint of its author’s personality, a condition that purely automated outputs from an LLM generally do not satisfy. Significant human creative choices in the formulation of prompts or in the selection of outputs may, depending on the circumstances, give rise to partial protection.

5. What should be done if sensitive data have already been entered into an AI tool without precautions ?

Act without delay: check the tool’s settings, including disabling history; exercise the right to erasure with the provider where applicable ; notify the DPO ; assess whether a personal data breach within the meaning of the GDPR must be reported to the CNIL ; and immediately take preservation measures if litigation is reasonably anticipated.

This publication is intended to provide general guidance to the public and to highlight certain issues. It is not intended to apply to specific situations or to constitute legal advice.

Introduction

In a digital environment where social media platforms shape corporate communication strategies, the use of hashtags has become virtually systematic. Yet this seemingly innocuous practice may, depending on the circumstances, encroach upon the exclusive rights of third parties.

The question of whether a hashtag may constitute an act of trademark infringement has now been addressed, at least in part, by French case law. A decision rendered on February 12, 2026 by the Paris Judicial Court provides a particularly instructive illustration.

I. The hashtag: A sign at the frontier of trademark Law

A hashtag, namely the typographical sign “#” associated with a word or expression, primarily serves a classification and categorization function on digital platforms. It enables internet users to gather publications from different sources under a common thematic thread. This indexing function lies at the heart of the legal debate: can a hashtag constitute “use as a trademark” within the meaning of intellectual property law?

The origin function: cornerstone of trademark protection

Under trademark law, only the use of a sign “as a trademark” is capable of constituting infringement. This implies that the sign is used to identify the commercial origin of goods or services, namely to indicate to the public that such goods or services originate from a specific undertaking. Article L.713-3 of the French Intellectual Property Code is explicit in this regard: infringement presupposes use in the course of trade that goes beyond a mere reference to a phenomenon or event.

However, the specific nature of hashtags lies precisely in their referential dimension: they point to content, a theme, or an external event, without necessarily seeking to distinguish the goods or services of the company using them. In practice, the boundary between descriptive or illustrative use and use as a trademark is therefore extremely narrow.

A Legal framework still under construction

To date, no legislative provision expressly governs the legal status of hashtags. French and European courts are progressively developing a case-by-case body of case law by applying traditional trademark law criteria to these new digital uses. This casuistic approach makes the analysis all the more delicate, as the context of each publication plays a decisive role in the legal characterization adopted.

II. The FFT v. Printemps case: A hashtag that does not indicate origin

The facts: A live shopping operation against the backdrop of Roland-Garros

In June 2023, the French department store chain Printemps organized a “live shopping” promotional campaign during which it broadcast video excerpts from previous editions of the Roland-Garros tournament. These excerpts featured iconic elements of the sporting event, and the company’s Instagram publications included the hashtag #RG.

The French Tennis Federation (FFT), organizer of the tournament and owner of French semi-figurative trademark No. 4290616 incorporating the initials “RG” (filed on July 29, 2016, notably in Class 41), considered that the campaign infringed its exclusive rights and brought proceedings before the Paris Judicial Court on several grounds:

– infringement of sports exploitation rights,
– parasitism,
– trademark infringement.

The Paris Judicial Court decision of February 12, 2026

The Paris Judicial Court decision of February 12, 2026 upheld two of the three claims asserted by the FFT. It recognized an infringement of the exclusive exploitation rights attached to the tournament and sanctioned Printemps for parasitic conduct, finding that the latter had improperly appropriated the notoriety and investments of the FFT for its own commercial benefit.
However, with respect to trademark infringement, the Court adopted a more nuanced approach. According to the wording of the judgment itself, the disputed publications “in no way refer to the purchase or promotion of a specific product, but rather to an atmospheric visual whose hashtag is not intended to indicate origin but to identify the tournament organized by the claimant.”

In other words, the Court held that #RG functioned as a tool for identifying and referencing an event, rather than as a distinctive sign designating the commercial origin of the products marketed by Printemps. In the absence of use “as a trademark,” trademark infringement could not be established.

A Solution consistent with prior case Law

This decision is consistent with an emerging line of French and European case law. In its judgment , in L’Oréal v. Bellure, of June 18, 2009 Case C-487/07, the Court of Justice of the European Union established that the use of a sign similar to a reputed trademark does not necessarily constitute infringement where it does not adversely affect the essential functions of the trademark, foremost among them the origin function.

III. When can the use of a hashtag amount to trademark infringement?

Although the FFT v. Printemps judgment excludes infringement under the specific circumstances of the case, it would be incorrect to conclude that a hashtag can never infringe trademark rights. The legal characterization depends on a rigorous contextual analysis, notably involving the following factors.

Criteria for recharacterization as trademark use

• Direct promotion of goods or services: where the hashtag accompanies a publication primarily intended to market or commercially promote a specific offer, the risk of recharacterization significantly increases.
• Reproduction of a reputed trademark: the use of a hashtag reproducing identically or almost identically a well-known trademark in a commercial context may constitute unfair exploitation of the reputation of that trademark (Article L.713-3, paragraph 2 of the French Intellectual Property Code).
• Likelihood of confusion: where the public may believe that the goods or services promoted under the hashtag originate from the trademark owner or from an economically linked entity, infringement may be established.
• Overall context of the publication: the juxtaposition of the hashtag with other trademark elements (logos, colors, registered visuals) or its inclusion within a large-scale communication campaign may constitute aggravating factors.

Conclusion

The FFT v. Printemps case confirms that trademark law, when applied to digital uses, requires a refined and rigorous contextual analysis. A hashtag is not, by nature, use “as a trademark.” Its characterization depends on the role it concretely plays within the company’s communication strategy: whether it serves merely as a thematic referencing tool or as a distinctive sign identifying the commercial offer. Intellectual property in the age of social media calls for a proactive legal approach, whether to structure an effective protection strategy or to secure online commercial practices.

Dreyfus law firm assists its clients in securing creations arising from employment relationships, combining contractual engineering and litigation expertise to build frameworks tailored to each industry.

Dreyfus law firm works in partnership with a global network of lawyers specialized in intellectual property.

Nathalie Dreyfus, with the support of the entire Dreyfus team.

Q&A

Can a hashtag be registered as a trademark?
Yes. A hashtag composed of a distinctive sign may be registered as a trademark. The “#” symbol itself is considered non-distinctive, but the overall combination formed by the symbol and the accompanying term may be registered if the term is sufficiently distinctive to identify the goods or services of a particular undertaking.

Can trademark infringement be established without a likelihood of confusion?
Yes, in the case of reputed trademarks. Article L.713-3 paragraph 2 of the French Intellectual Property Code protects trademarks with a reputation even in the absence of a likelihood of confusion, where the use of the sign takes unfair advantage of, or is detrimental to, the distinctive character or reputation of the trademark.

What risks does a company incur when using, without authorization, the hashtag of a registered trademark?
The sanctions may be substantial: compensation for the damage suffered by the trademark owner, removal of the infringing publications, prohibition against further use of the sign, and, in the most serious cases, criminal penalties for trademark infringement (up to four years’ imprisonment and a fine of €400,000 for natural persons under French law). Acts of parasitism may also give rise to additional damages.

How can businesses protect themselves against disputes relating to hashtag use?
Protection involves systematic trademark clearance searches prior to any communication campaign, the implementation of internal legal validation procedures for digital content, and — for trademark owners — the registration of hashtags associated with their brand identity. Assistance from a specialized intellectual property law firm makes it possible to identify risks upstream and react swiftly in the event of infringement.

Can parasitism and trademark infringement be claimed cumulatively?
Yes, under certain conditions. French case law permits cumulative claims where the legal grounds are distinct and the alleged harm does not overlap. As illustrated by the FFT v. Printemps case, a single commercial operation may constitute parasitic conduct without necessarily amounting to trademark infringement, since these two legal characterizations are subject to different requirements.

This publication is intended to provide general guidance and highlight certain legal issues. It is not intended to apply to specific situations or to constitute legal advice.