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On February 15 the French Government published draft orders transposing the Directive (EU) 2015/2436 of the European Parliament and of the Council of December 16, 2015 known as the “Trademark reform Package”. This Directive aims to harmonize and modernize trademark law in the EU Member States.

This reform, which came into force on March 23, 2016 led to the adoption of two new legislative texts:

• Regulation 2015/2424, amending Regulations 207/2009/EC and 2868/95/EC, which became effective on October 1^st, 2017.
• Directive (EU) 2015/2436 of 16 December 2015, amending Directive 2008/95/EC. It had to be transposed into national legislation within three years, i.e. before January 14, 2019.

The draft orders were published one month late, on February 15. Major changes are made to the legislative and regulatory parts of the Intellectual Property Code as well as the Judicial Organization Code and the Consumer Code.

It is therefore essential to outline the main changes that could affect French Intellectual Property Code.

The grounds for refusing an application for registration are expanded. In addition to  signs that are contrary to public policy or morality, and signs that provide misleading information on the quality of a product or service that were already excluded from registration, the order now includes grounds such as:

• Appellations of origin
• Geographical indications
• Previously registered plant variety denominations
• Applications made in bad faith by the applicant

These grounds for refusing an application for registration are now expressly included in modified article L. 711-3 of the French Intellectual Property Code.

Being in line with the objective of the “Trademark reform Package”, the draft order abolishes some of the national French law peculiarities, bringing it in line with the EU law. Thus, the graphic representation requirement in Article L. 711-1 is abolished. It should therefore be possible to register sound trademarks, multimedia trademarks, motion trademarks, etc. in the same way as for European Trade Mark since 2017 before the EUIPO (European Union Intellectual Property Office).

Similarly, the opposition procedure against a trademark protected in France is modified to become more similar to European Trademark Office (EUIPO) opposition procedures.

Prior rights that may be invoked in an opposition are extended – Amendment of Article L. 712-4 of the Intellectual Property Code. From now on, an opposition action against a registration application may be based on:

• A well-known trademark or a notorious trademark, when the trademark in dispute is likely to unfairly take advantage from the reputation of the trademark or cause prejudice thereto
• A company name or a trade name
• A geographical indication
• The name, image or reputation of local authorities, institutions or public law bodies .

The draft order adds that an opposition may be based on several rights pertaining to the same owner as it is already the case in opposition proceedings before the EUIPO for European Union trademarks.

The opposition procedure is also modified. For a period of two months following the publication of the application for registration, a formal opposition to the application for registration may be filed before the INPI in the event of infringement of one of the earlier rights. However, the draft amends articles L. 712-4 and R. 712-14 of the French Intellectual Property Code: in addition to the usual period of formal opposition, the opponent has one additional month to provide the statement of the grounds on which the opposition is based, as well as certain documents identifying the parties.

The decision will be rendered after an adversarial procedure that includes an investigation phase involving a debate between the opponent and the owner of the contested application for registration.

The regime for the protection of certification trademarks and collective trademarks is amended – Amendment of Articles L. 715-1 et seq. The draft order indeed introduces new articles relating to the regime for the two above-mentioned types of trademarks.

Disputes concerning invalidity or revocation of trademarks are specified. Articles L. 716-1 to L. 716-5 are amended, and renamed, and the draft order proposes the following changes:

• An action for invalidity filed by the owner of an earlier trademark may be rejected if, at the request of the owner of the later trademark, he cannot prove genuine use of the earlier trademark during the five years preceding the action.. Lack of use of prior trademark will become an argument in defense against an action for a declaration of invalidity of a trademark.

• Invalidity actions become imprescriptible (Article L. 716-2-6) with the exception of actions based on well-known trademarks within the definition of the Paris Convention (Article 6 bis) which are time-barred after 5 years from the registration date of the contested trademark with the exception of tolerance of the subsequent trademark by the owner of the prior rights for a period of no less than 5 years.

• Clarification of the starting point for the prescription of infringement proceedings. According to new article L. 716-4-2, it is 5 years as of the day on which the holder of a right knew or should have known about the last act of counterfeiting enabling him to exercise it.

It should also be mentioned that the amendment of Article L. 714-5 specifies the starting point of the period of disqualification for non-use. Although the duration of the period of non-use was defined before (i.e. 5 years), the starting point of the period was hard to determine due to differences in interpretation in the case law. The draft thus explicitly sets the rules for calculating the deadline for a revocation stating that it should be calculated starting (at the earliest) from the date of publication of the trademark registration.

The procedure for filing an action for invalidity or revocation of a trademark is simplified with the introduction of an administrative procedure before the INPI. Article L. 713-6 becomes article L. 716-5.

Thus, revocation actions and invalidity actions filed as a principal action (and where the action for invalidity is exclusively based on grounds of absolute invalidity or certain grounds of relative invalidity) will now be exclusively submitted to the INPI, unless some judicial litigation is already pending between the parties. In that case, the judge will remain exclusively competent. Similarly, other civil actions and trademark claims, such as invalidity actions and revocation actions filed as counterclaims, will remain under the exclusive jurisdiction of the competent courts (Tribunal de Grande Instance).

This new procedure before the INPI should come into force in the first quarter of 2020.

Finally, the last notable point of the draft order is the modification of the renewal date of a French trademark, included in modified article R. 712-24. In principle, a trademark may be renewed until the last day of the month when it expires, and within an additional grace period of six months. The draft order provides that the request for renewal can be made, at the earliest, one year before the expiry of a trademark, and at the latest within an additional period of six months from the day after the expiry date for an extra fee.

This is probably the biggest reform of French national trademark law since the law of January 4, 1991 transposing the 1988 Directive. Although the draft orders have not yet been validated, it is nevertheless subject to public consultation. Various IP associations involved in the consultation had to propose their amendments before March 20, 2019. The final draft order of the “Trademark reform Package” should be adopted within 3 months.

Trademark law has long recognized the principle of specialty, which signifies that the owner of a trademark has a monopoly on its sign only for the goods and services that the sign designates. However, application of this principle needs a further consideration in cases related to alcoholic beverages.

 Article L713-3 of the French Intellectual Property Code states that “The following are prohibited, unless authorized by the owner, if this may result in a risk of confusion on the part of the public: a) The reproduction, use or affixing of a trademark, as well as the use of a reproduced trademark, for goods or services similar to those designated in the registration“.

Thus, according to the principle of specialty, two identical or similar signs may coexist as long as they do not designate the same goods and services. However, such a reasoning is challenged in cases when the French public health law is involved (Evin Law n° 91-32 of January 10, 1991).

According to Evin Law, a registered trademark designating alcoholic beverage products can be subject to a cancellation action by owners of prior trademarks even when their trademarks do not designate alcoholic beverages in the specification.

Indeed, the Evin Law prohibits propaganda and indirect advertising of alcoholic beverages. The coexistence of a “new” trademark designating alcoholic beverage and prior trademarks  would be considered as a form of propaganda and indirect advertising of identical or similar trademarks designating alcoholic beverages.

In other words, if a company wishes to register an alcoholic beverage related trademark that is already in use by a prior trademark for goods other than alcoholic beverage products, it may face a conciliation procedure.

Article L.3323-3 of the French Public Health Code, a legal tool with a wide application range

The article L.3323-3 of the French Public Health Code states that: “Propaganda or indirect advertising is considered to be propaganda or advertising in favour of an organisation, service, activity, product or article other than an alcoholic beverage which, by its graphic design, presentation, use of a name, brand, advertising emblem or other distinctive sign, recalls an alcoholic beverage“.

It is on this legal ground that owners of prior trademarks designating goods and services other than alcoholic beverages may file an action in order to obtain cancellation of identical or similar post-trademarks designating alcoholic beverages.

The company named DYPTIQUE used this legal ground to obtain the cancellation of the trademark “Diptyque” registered by the company HENESSY.

The company named DIPTYQUE is the owner of two prior trademarks “Diptyque” – a French trademark designating classes 3, 14, 18, 21, 24 and 25, and a European Union trademark designating classes 3, 14 and 35.

DIPTYQUE manufactures and markets candles and scented water.

The company initiated a cancellation action against a trademark “Diptyque” registered by HENNESSY, a French cognac manufacturer, designating alcoholic products in class 33. According to Article L.3323-3 of the French Public Health Code any advertising made by DIPTYQUE is considered as indirect advertising of the products designated by the “Diptyque” trademark, which belongs to HENNESY, and is therefore prohibited

The existence of the cognac related trademark represents a real obstacle to DYPTIQUE’s business activities and makes it impossible to use its prior trademarks.

The French Court de Cassation, in its decision from November 20, 2012, ruled that “the registration of the Diptyque trademark by HENNESSY and the marketing of products under it create an obstacle to the free use of the first trademark“.

Article L.3323-3 of the French Public Health Code is therefore widely interpreted by the judges of the Court de Cassation. They do not take into consideration the fact that DIPTYQUE’s trademarks do not designate alcoholic beverage products in class 33 and do not in principle constitute prior right. This analysis leads to the conclusion that the provisions of the French Public Health Code prevails over the principle of specialty in trademark law.

This reasoning held by the High Court provides a real advantage for owners of prior trademarks that do not designate alcoholic beverages in protection of their trademark rights. However, such reasoning has recently been challenged by the Tribunal de Grande Instance de Paris in the “Cache-Cache” case.

Article L.3323-3 of the Public Health French Code, a legal tool with a narrow application range

CACHE-CACHE is a major player in the ready-made clothing market. The company owns two prior “Cache-Cache” trademarks – a French trademark and a European Union trademark. The company turned to the Court of First Instance of Paris to obtain cancellation of an application for  registration of a trademark “Cache-Cache” filed in classes 31, 32 and 33 to designate alcoholic beverages.

The Court of First Instance of Paris, in its decision dated from November 3, 2017 dismissed the CACHE-CACHE case that was based on Diptyque case law. The judges ruled on favour of the defendant’s argument and  decided that despite public health considerations, an in-depth analysis and an overall assessment of the situation was required.

Thus, the court concluded that CACHE-CACHE did not demonstrate “how the exploitation of its brands for women’s clothing and accessories in its eponymous boutiques and on the Internet via its websites cachecache.fr and cachecache.com could be considered as indirect advertising in favour of alcoholic beverages“. Consequently, the mere identity or similarity of the trademarks involved cannot be sufficient to serve as indirect advertising for alcoholic beverages as prohibited by Article L.3323-3 of the Public Health Code.

In other words, the second trademark designating alcoholic beverages cannot ipso facto infringe the first trademark designating other goods and services.

Thus, in order to obtain cancellation of an identical or similar subsequent trademark, it is no longer possible to rely solely on  provisions of the French Public Health Code. It is necessary to demonstrate that there is actually indirect advertising that hinders the influence of the original trademark. Potential trademark’s damages can be demonstrated by proving that consumers can establish a link between the companies’ respective brands.

This decision narrows down a very broad application of article L.3323-3 of the French Public Health Code. While the restrictions contained in the article are limited in their scope, the principle of specialty and Article L.713-3 of the Intellectual Property Code are fully applicable again.

The new case law provides an opportunity for companies to register trademarks that are identical or similar to prior trademarks that do not designate alcoholic beverage products without facing a cancellation action with regard to their registration.

Subsequently, the owners of identical or similar prior trademarks that do not designate alcoholic beverage products will not be able to claim prior rights in an absolute manner on the grounds that the coexistence of trademarks would hinder their business activity, and, in particular, their advertising strategy with regard to the provisions of Evin law.

It is still unclear whether the judges of the Appeal Court and the Court de cassation will follow the reasoning of the Court of First Instance of Paris, or whether they will give a decision in line with the “Dyptique” case law of the Cour de Cassation.

We will follow the development of the case

The withdrawal of the United Kingdom from the European Union, either with or without ratification of an agreement, will have an impact on trademark law, domain names, and personal data alike. It is therefore necessary to understand the changes and get prepared.

Changes for trademark owners

   1. European Union trademarks (EUTM)

• EUTMs registered before Brexit will be protected automatically and free of charge by comparable trademarks in the United Kingdom (UKTM), without any loss of priority or seniority; an opt-out option is available.
• A holder of EUTMs located in the United Kingdom will need to appoint a representative in a Member State for correspondence purposes.
• Use of an EUTM only in the United Kingdom will no longer be considered as an actual use.
• UK courts will no longer have jurisdiction over European trademarks. Only the proceedings commenced before Brexit will continue before the courts in the United Kingdom. The United Kingdom will no longer be bound by decisions of the Member States.

Dreyfus advises you to:

If you are an owner of a registered European trademark:

• No need for a new registration: your trademark will automatically be registered under a comparable brand in the United Kingdom.
• BUT our advice is to use your trademark in several countries and not only in the United Kingdom.
• If your trademark protection is about to expire, renew it before Brexit in order to automatically benefit from equivalent protection in the United Kingdom.

If you applied for an European trademark and your application has not yet been accepted:

• Try to obtain the registration before Brexit. If it is not possible, you will still benefit from a 9-month priority period when you will be able to apply for an equivalent trademark in the United Kingdom without any loss of priority or seniority.
• BUT anticipating trademark registration in the UK is useful in order to obtain prior rights in the EU and the UK, and to anticipate administrative delays due to an increase in number of UKTM trademark applications.

If you have initiated a trademark dispute proceedings :

• Resolve ongoing disputes that you initiated before the date of the exit of the United Kingdom. The outcome of the dispute concerning a European trademark will impact all the countries concerned, including the United Kingdom.

If you are a defendant in a trademark dispute :

• Wait for the effective date of the Brexit. The resolution after Brexit could allow retaining the trademark in the United Kingdom, while a resolution before Brexit will simply open the possibility for initiating the procedure in order to convert a European trademark into a UK trademark.
• Consider filing separate actions in the European Union and the United Kingdom. A custom strategy would be required for each individual case. An in-depth study will have to be carried out to determine the necessary procedures. Dreyfus advises you on the best strategy to adopt in your particular case.

   2. United Kingdom brands (UKTM)

• Trademarks registered in the United Kingdom can no longer be used as prior rights in proceedings against European trademarks.

Dreyfus advises you to:

• Register European trademarks now to obtain rights in the EU and protect your rights in the United Kingdom and the European Union.

   3. International brands (WOTM)

• International trademarks designating the EU will be treated same way as European trademarks.
• European trademark owners residing in the United Kingdom will no longer be able to apply for international trademarks based on European trademarks.

Dreyfus advises you to:

• Register international trademarks on the basis of your European rights, in order to obtain global protection.

Changes for holders of <.eu> domain names

Reminder: A domain name in <.eu> can be reserved by a company having its registered office, central administration or main place of activity in a Member State, or by any person residing in the EU.

• Companies and individuals residing in the United Kingdom will no longer be able to register or renew a domain name with <.eu> TLD.
• Domain names with <.eu> TLD for which the registrant is a resident of the United Kingdom will be deactivated and then re-opened for registration.

Dreyfus advises you to:

• Update your contact details now indicating that you are an EU resident (e.g. a subsidiary).
• If this is not possible, transfer your domain name to an EU resident now.
• Be careful to take the necessary measures to avoid a strategic domain name to become a target of cybersquatters.

Personal data changes

With the adoption of the Data Protection Act 2018, together with the GDPR in the UK the level of personal data protection requirements is expected to remain unchanged. In the event of a withdrawal agreement governing Brexit, the GDPR would become a provision of the United Kingdom domestic law.

However, the change of the United Kingdom’s status will have practical consequences for controllers and processors.

• Data controllers and processors will have to appoint a representative in the EU if they carry out processing activities related to persons in the EU.
• Transfers of personal data between the United Kingdom and EU Member States will no longer be unrestricted. As a third country, the United Kingdom could seek to benefit from an adequacy decision recognizing it as a state with an adequate level of protection of personal data. Otherwise, the transfer can only be made after appropriate security measures for personal data are put in place.

Dreyfus advises you to:

• Limit transfers to/from the United Kingdom to what is strictly necessary.
• Monitor the transfers to ensure that they comply with the provisions of the GDPR, for example by using “standard data protection clauses”.
• Mention the transfers in the information notices to the data subjects.

It was after a lengthy procedure that the French Supreme Court, the Cour of Cassation, in its judgment delivered by the Commercial Chamber on November 14, 2018, held that there was no likelihood of confusion between the prior mark ECOLAB and the contested mark KAIROS ECOLAB.

Ecolab USA Inc, owner of the earlier trademark “ECOLAB”, had filed an opposition to the application by KAIROS.   for registration of the French trademark “KAIROS ECOLAB”. Ecolab USA Inc. based its claim on its international word trademark “ECOLAB” designating the European Union and registered on April 6, 2009. The company could also claim priority because of a November 26, 2008 German registration.

The trademark “KAIROS ECOLAB” has been registered by SARL Kairos, which has an ecological laboratory for which it uses this trademark.

The opposition filed by Ecolab USA Inc. was rejected by the INPI Director on August 8, 2013.

The Paris Court of appeal, in its judgment of April 25, 2017, which was held on remand after the first decision in appeal had been quashed by the Court of Cassation, , rejected again Ecolab USA’s opposition by demonstrating that there was no likelihood of confusion between the trademarks “ECOLAB” and “KAIROS ECOLAB”. Ecolab USA Inc. lodged an appeal against this decision to the French Supreme Court.

In its judgment, the French Supreme Court clarifies the assessment of the likelihood of confusion when dealing with a prior trademark composed of a term (here Ecolab) and a later trademark composed of a juxtaposition of the same term (Ecolab) and a new term corresponding to the applicant’s corporate name (Kairos).

The Court reiterated that the French Intellectual Property Code, in Article L713-3(b), prohibits the imitation of a trademark and its use, for goods or services identical or similar to those designated in the registration, if this may result in a risk of confusion on the part of the public.

Furthermore, the Court of Justice of the European Union, in its judgment LIFE / THOMSON LIFE (C-120-04), interpreted Article 5 of Directive 89/104/EEC of December 21, 1988 as meaning that a likelihood of confusion may exists in the mind of the public in the event of the identity of the goods or services, where the contested sign consists of the juxtaposition, on the one hand, of the name of the third party’s company and, on the other hand, of the registered trademark, which has normal distinctive power, and which, without creating by itself the overall impression of the composite sign, retains in the latter an autonomous distinctive position.

The French Supreme Court stated that the Court of Appeal had violated Article L713-3 of the French Intellectual Property Code, by holding that the trademark “ECOLAB” did not retain an autonomous distinctive position within the sign “KAIROS ECOLAB”.

The Court of Cassation noted that the contested trademark consisted of the juxtaposition of the earlier trademark with a company name, “Kairos”. This corporate name is a perfectly arbitrary term placed in a position of attack in the contested trademark and has an important semantic value.

The French Supreme Court held however that “while the term “Ecolab” has its own distinctive character evoking an ecological laboratory, the term “Kairos”, which is perfectly arbitrary, refers to the corporate name of the eponymous company and is placed in a position of attack, has an important semantic value which is superimposed to the term “Ecolab” to form a conceptually different whole from the earlier trademark by referring to the ecological laboratory of the company Kairos, which is precisely identified , so that it constitutes a whole unit having a different meaning with respect to the meaning of said elements taken separately”.

Consequently, the juxtaposition of the corporate name “Kairos” with the term “Ecolab” forms a conceptually different whole, “KAIROS ECOLAB”, compared to the prior trademark “ECOLAB”. There will therefore be no likelihood of confusion in the minds of the public between the two trademarks. The public could therefore not believe that the contested trademark is be a version or an adaptation of the prior trademark.

It should therefore be noted that even if there is an identity or a similarity between the goods and services, such a juxtaposition, because it forms a conceptually different whole with respect to the prior trademark, will make it possible to avoid the risk of confusion in the minds of the public and consumers. The juxtaposition can thus be registered at the INPI as a trademark for the goods and services it designates.

The famous Alsatian Choucroute (Sauerkraut) was finally recognized on July 3rd, 2018 as a Protected Geographical Indication (PGI) at the European level. It provides an opportunity to revisit the term “protected geographical indication” and the challenges it represents on the local and international level.

After obtaining its national protected geographical indication status in 2012, this summer, on July 3rd, 2018 (Commission Implementing Regulation (EU) 2018/938) the Alsatian sauerkraut obtained its European protection thanks to a local Association (Assocation pour la Valorisation de la Choucroute d’Alsace) which filed an application and fought for almost 20 years to obtain the designation.
Now 48 cabbage producers and 11 sauerkraut producers will comply with specifications in order to obtain a geographical indication starting from January 2019.

Alsatian sauerkraut should not be confused with the dish named “sauerkraut” as the national and European PGI only concern cabbage that is used as a basis of the dish.

The geographical indication was originally a part of national trade but with export expansion it has also became component part of international trade, and as such, it has an economic value and advantages.

The PGI does not constitute a property right. It intrinsically available to any person to use as long as they comply with applicable specifications.

The article 22 (1) of the TRIPS Agreement outlines two main purposes of Geographical Indication (GI): to identify a region or a geographic area and therefore the geographical origin of a product and to indicate the quality, reputation or other characteristics of a product.

At the European level, the Regulation (EU) No 1151/2012 of the European Parliament and the Council of November 21, 2012 on quality schemes for agricultural products and foodstuffs defined and established the protection of Geographical Indication.
Geographical Indication is a “name that identifies a product originating in a specific place, region or country whose given quality, reputation or other characteristic is essentially attributable to its geographical origin, and at least one of the production steps of which take place in the defined geographical area.”

Alsatian Sauerkraut has been produces in Alsace since the 15th century in two regions – Bas-Rhin and Haut-Rhin, where cabbage grows successfully due to the soil composition and the climate.

Sauerkraut is linked to a specific expertise and manufacturing process that must be respected. Cabbage is placed in fermenting tanks where natural fermentation takes place due to lactic bacteria present in cabbage and in the environment.
Cabbage must be cut in thin slices and tossed with salt.
The manufacturing process and required expertise are set out in the applicable specifications.

Even though in consumer’s mind the PGI is often associated with quality guarantee, in reality this is not the case.
The PGI only aims to guarantee the origin of a product and the authenticity of manufacturing process.

The Court of Justice of the European Union defined the essential functions of geographical indication. It aims to protect manufacturers and production areas as well as consumers guaranteeing product authenticity in terms of geographic origin and manufacturing process (typicality – only for wine). These functions that were initially based on case law were enshrined in European regulations.
Three Regulations lay down the rules applicable to PGI: Regulation (EC) No 110/2008 of the Parliament and the Council of January, 15, 2008 on spirit drinks, Regulation (EU) No 1151/2012 of the Parliament and the Council of November, 21, 2012 on quality schemes for agricultural products and foodstuffs and Regulation (EU) No 1308/2013 of the Parliament and the Council of December, 17, 2013 regarding wine products.

Article 13 of the EU Regulation 1151/2012 grants protection to registered names against any commercial use in respect of products that are not covered by registration or in case where such use exploits the reputation of the protected name. It also protects against any misuse, imitation or evocation even in case when the true origin of the products is indicated and against any practice liable to mislead the consumer and any other false indication relating to the provenance, origin, nature or essential qualities of the product.

The protection conferred by a PGI is based on the rules relating to deception, fight against fraud, unfair competition and parasitism and makes it possible to protect cabbage grown in Alsace, for example, from cabbage grown and processed in other regions and countries using non-traditional methods.

Recognition of a PGI therefore represents a considerable economic advantage for local and international manufacturers. It also provides consumer protection by guaranteeing product authenticity.

Samoa’s membership confirms that the Madrid System and its protocol are major assets for the international protection of the trademarks, offering a convenient and economic solution for trademark owners around the world.

The Madrid Protocol comes to in Samoa on March 4th, 2019

The World Intellectual Property Organization (WIPO) announced on December 4th that Samoa, an independent country located in Occidental Polynesia, deposited its instrument of accession to the Madrid Protocol. As such, Samoa is now the 103rd member of the Madrid System.The Protocol will come to force on March 4th, 2019.

The Madrid Protocol, an attractive solution

Due to globalization, efficiency and speed are the main goals. The Madrid system has been constantly adjusted in accordance to national legislations. To address these concerns, the Madrid Protocol was created. It came to force in April 1996. The protocol is administered by the International Office of the WIPO, and is one of the essential elements of the international trademark application system.

The Protocol provides a unique mean that allows to centralize international trademark management process for the entire lifespan of the trademarks. The simplicity of this instrument entices new members, especially given the fact that the application process is very simple. Only one application and a fee payment to a national or regional intellectual property office of one of the members of the Madrid protocol is required. Applicants indicate the countries they want to select from the list of the 119countries covered by international trademark protection.

Consequently, starting from March 4th, 2019 owners of current and future international trademarks will have the possibility to extend the protection of their trademark to Samoa or designate the territory at the time of the application.

Dreyfus assists you

Each member of the Dreyfus team brings the expertise and industry knowledge that guarantees support and guidance in this area. The firm’s dedication and creativity enabled Dreyfus to develop a unique online trademark management solution. For all our clients, Dreyfus IPweb ® represents an effective trademark portfolio management solution.

After numerous delays, Canada is finally implementing the new provisions set out in the “Trade-marks Regulations”

The Canadian government has recently published the Regulations in the Canada Gazette as a part of the process to enact the new legislation. The act is the last formal step before the implementation of the provisions based on the 2014’s Trade-mark Act. The provisions will have a profound impact on Canadian trademark law.

In this regard, the date for the implementation of the Regulation and the provisions has been set for 17 June 2019.

The changes in the Canadian trademark law have a major impact on all stages of Canadian trademark lifecycle. The main changes can be divided into two categories:

I / Main provisions

1. Expanding the definition of a trademark

New types of registerable trademarks will be introduced such as colors, scents, textures and tastes.

It is also noteworthy that for the first time the Canadian Intellectual Property Office (CIPO) will examine the distinctiveness of submitted trademark applications. The CIPO will get the possibility to ask for proof of distinctiveness of non-traditional trademark types. This practice can potentially render the trademark registration process more complicated. One can better gage the impact of the new legislation on the trademark registration process once the CIPO announce its’ decisions regarding the non-traditional trademarks.

2. Implementing the Nice Classification of goods and services

All new trademark applications filed after June 17, 2019 will be classified according to the Nice Classification system, issued from the Nice Arrangement et now adopted by the Canadian legislation.

All trademark applications filed before the date on which the new law will come into force will be suspended until the wording of the application is modified according to the new law.

It is therefore advisable to use the Nice Classification system for new trademark applications to avoid delays in Canadian trademark registration process.

3. Eliminating the “filing grounds” requirement

It will be no longer necessary to provide a reason for filing a Canadian trademark application. Any applicant who uses or plans to use a trademark can file a trademark application without providing any reason for it.

This goes hand in hand with eliminating the requirement to provide a declaration of use.

4. Possibility of claiming priority

Starting from 17 June 2019, a priority claim can be made based on any previous trademark application. It is no longer confined to the applicant’s country of origin.

5. Eliminating the requirement to provide a declaration of use

One of the most notable provisions of the new “Trade-Mark Regulations” is the elimination of the requirement to provide a declaration of use.

Meaning that starting from June 17, 2019, a trademark application that has been accepted for examination may be registered as soon as the applicant pays the registration fee. The changes will lead to greater savings for Canadian trademark applicants as the extension of application deadline and declaration of use will be eliminated.

The new provision will apply starting from the date when the new law will come into force.

Therefore, if a trademark application was filed before June 17, 2019, the owner of the trademark will have the opportunity to extend the deadline to file a declaration of use until the date when the new law will come into force. In this case, the applicant will no longer be required to provide the declaration of use.

6. Calculating registration fee per class

Registration fees for Canadian trademarks will be calculated based on the number of classes of goods and services ($300CA for one class and $100CA for each additional class if application is filed online), instead of a single government filing fee of $250CA that applies today. The registration fee for a paper deposit will be higher.

It is advisable to file several trademark applications that correspond to the filing system based on different classes of goods and services before the new legislation comes into force.

7. Dividing trademark applications

Another option offered by the Canadian “Trademark Regulations” is the ability to divide trademark applications. Applicants will have the opportunity to split a trademark application into different classes, into different products and services, and then to merge the previously divided registrations.

The option can be very advantageous, particularly when an opposition has been filed against some of the goods and services designated by the trademark application or in case when a provisional objection was issued.

Thus, it will be possible to obtain a registration for products and / or services that initially were not included in trademark application. If the initial application is accepted for other products and services, then a second application will be filed.

8. Accession to the Madrid Protocol

Canada’s accession to the Madrid Protocol represents a significant change as it makes it possible to designate Canada as part of an international trademark application. It will lead to an increase in the number of trademarks registered in Canada.

9. Eliminating evidence of transfer requirement

No documents will be required to record a trademark assignment or a transfer. However, the Canadian Trademark Office will still be able to request such proof, but it will no longer be required at the time of registration.

In addition, it will no longer be necessary to associate trademark assignment or transfer with related trademarks.

10. Registration and renewal terms

Trademark registration and renewal terms are reduced to 10 years instead of 15.

Renewal fees will be calculated based on the number of classes being renewed ($ 400CA for one class and $ 125CA for each additional class).

The new renewal fees should be paid starting from June 17, 2019 and no earlier than 6 months before the expiry date of a trademark.

As a continuation of Canada’s accession to the Nice Agreement, it is expected that the trademarks being renewed must comply with the Nice Classification and, therefore, the trademark rights holders will have to modify products and services accordingly.

11. Possibility to inform the Canadian office of the existence of third party rights

The “Trademark Regulation” offers the possibility to inform the Canadian Trademark Office about existing third party prior rights during application examination process.

Third party prior rights were considered by the Trademark Office only during opposition proceedings.

It may be useful for protecting trademark rights and avoiding opposition proceedings.

II / Transitional provisions

The date of implementation of certain provisions is not yet determined. Therefore transitional provisions have been put in place including:

1. Examining the distinctiveness of a trademark will apply to all pending trademark applications

 According to the Regulations, the distinctiveness of a trademark will be now examined based on priority of application.

Meaning that all trademark applications, including the applications that were filed before June 17, 2019 will be examined for distinctiveness.

2. Changes in processing time

Processing time in some cases such as provisional refusal of registration have been modified.

In this respect, it is important to note that processing time changes apply only to refusals issued after June 17, 2019.

3. Grounds for opposition will apply to applications filed before June 17, 2019

Grounds for an opposition in Canada may be requested for any opposition proceeding before June 17, 2019, even if the opposition period expires after that date. This is also the case for trademark applications published before June 17, 2019.

Oppositions can be based, for example, on the grounds on which the deposit is based, which will no longer exist after coming into force of the said Regulation.

Consequently, trademark applications and oppositions filed after coming into force of the new Regulations can, for example, be based on the fact that an applicant does not use or does not intend to use the trademark.

The purpose of the Canadian “Trademark Regulations” is to simplify Canadian trademark applications and to allow more businesses to obtain trademark protection in Canada.

The disadvantage of a simplified process that eliminates the requirement to file a declaration of use increases the risk of fraud from third parties who file trademark applications without the intention to use them.

Further changes will be implemented as the consequence of an Agreement between the United States, Mexico and Canada as well as the C-86 budget law implementation.

Like any legislative changes, the practical application of the new provisions will depend on interpretation given by judge, especially in the case of trademark distinctiveness examination.

The image of property cannot be subjected to an exclusive right. This is also valid for public domain properties, as stated in the Council of State’s decision dated April 13, 2018. (CE  13-4-2018 n°397047, Etablissement public du domaine national de Chambord c/ Société Kronenbourg). In this case, the Kronenbourg company used a photography of Chambord castle as one of its advertisements. Chambord’s public facility then asked for a fee. In lower court, Orleans’s administrative tribunal gave reason to Kronenbourg by rejecting the fee demand. The court declared that only Chambord castle belonged to the public domain, not a photography representing the castle.

The public facility then appealed before Nantes’ administrative Court of Appeal on December 16, 2015. The Court rejected the public facility’s pecuniary claims, because it didn’t have jurisdiction on such issues, but nevertheless recognized that the Chambord castle had the power to manage the castle’s image, as a public domain’s administrator. The Chambord castle then lodged an appeal in cassation before the Council of State. The Council of State recalled that, according to article L1 of the General Public Property Code, the image of public properties is not part of the State’s concern. In addition to that, it also highlights that a public property’s image is likely to be a property. Furthermore, the Council of State also brought some clarifications concerning the terms of use of public domain properties’ image. As such, it was stated that the use of public properties’ image is not subjected to any prior administrative control. Commercial use is thus available to all and free of charge, as long as the image does not lead to a private use of public property. If it isn’t the case, then an administrative authorisation will be necessary. The Council of State appears to agree with the Court of Cassation’s position. Indeed, as a matter of private law, the question surrounding properties’ right to image has often been the centre of multiple judgments. Those same decisions have led to significant jurisprudential evolutions. The first judgments found their origins in article 9 of the Civil Code, the right of private life’s respect. It was about proving that the publication of a building’s image constituted an infringement to private life, which turned out to be more difficult to demonstrate than expected. (Cour de Cassation, Chambre civile 2, du 29 juin 1988, 87-10.463). Other judgments then relied on article 544 of the Civil Code, concerning property right. Property right is a fundamental right with a constitutional value (Cons. const., n° 81-132 DC, 16 janv. 1982 ). According to the Declaration of the Rights of Man and of the Citizen’s article 17, it relates to an “unavoidable and sacred right”. Since then, and in accordance also with article 544 of the Civil Code, property right is regarded as an absolute, exclusive and perpetual right. At first, the Court of Cassation recognized on March10, 1999 that “only the owner owns the right to exploit his property, however he wishes to do so.” (Cour de Cassation, Chambre civile 1, du 10 mars 1999, 96-18.699, Café Gondré). But afterwards, the Court of Cassation stated that the commercial exploitation of a property’s image does not in itself constitute an infringement to the right of use. It is only the case when there is a “noticeable disorder of an owner’s right of use”. (Cour de Cassation, Chambre civile 1, du 2 mai 2001, 99-10.709, l’îlot du Roch Arhon).

Following this judgement, the Court of Cassation strengthened its statement by affirming that “The owner of a property does not have an exclusive right on its image; however, they can still oppose itself the use of the image by a third-party when it causes an abnormal inconvenience”. (Cour de Cassation, Assemblée plénière, du 7 mai 2004, 02-10.450, Hôtel de Girancourt). Since then, article 544 of the Civil Code has been replaced by ancient article 1382 of the Civil Code (now known as new article 1240 after the obligations law’s reform), in order to define the term “abnormal inconvenience”. For instance, a winegrower affixing images of a castle belonging to a competitor on his bottles is now recognized as an abnormal inconvenience. (Cour de cassation, civile, Chambre civile 1, 28 juin 2012 10-28.716).

Ultimately, it is no longer possible to stop a third-party from using someone else’s image of a property, unless one manages to prove that the broadcasted image causes an abnormal inconvenience to the property’s owner. Such an inconvenience can be related to free-riding, disloyal competition, or even infringement of private life.

The last ICANN meeting of the year was held in Barcelona, Spain between October 20nd and 25th, 2018. ICANN Meetings provide a forum to discuss internet-related issues that affect brand owners. It is therefore critical for brand owners to follow and participate in discussions. Several topics were discussed during the meeting that are of particular relevance to brand owners, including the impact of the GDPR on the WHOIS, Rights Protection Mechanisms (RPMs) and new gTLD subsequent Procedures. Dreyfus attended ICANN63, and this article highlights the key takeaways from the ICANN 63.

Whois : the Temporary Specification

One of the major topics of discussion at ICANN63 was, of course, the impact of the European Union’s General Data Protection Regulation (GDPR) on the WHOIS. As a result of the entry into force of the EU’s GDPR in May registrars have redacted domain name registrant’s details, making it difficult for brand owners to enforce their rights. As a result, ICANN adopted a Temporary Specification to allow registries and registrars to continue to comply with their ICANN contractual requirements and with the GDPR.

The Temporary Specification still allows collecting registration data (including registrant information, administrative and technical contact). However, it restricts the access to personal data. Users who have a legitimate interest to get access to the information will have the possibility of contacting the registrant or administrative and technical contacts through an anonymized email or web form.

The Expedited Policy Development Process (EPDP) created to develop permanent policy to comply with the GDPR, met at ICANN in Barcelona to continue discussions on this topic in order to decide whether to confirm the Temporary Specification (becoming ICANN Consensus Policy) or modify it by May 25th, 2019 (the date on which it will expire). The EPDP published the Initial Report on the Temporary Specification on November 21rst, 2018 which was open for comment (until December 21rst) Following the review of public comments, the EPDP will work on the Final Report on final adoption of the temporary specification.

The unified Access Model

ICANN also initiated a separate process for a « Unified Access Model », a centralized WHOIS system managed by ICANN. They will be sending their feedback to the EPDP working group. The idea behind the Unified Access Model is that ICANN will assume responsibility and liability from registries and registrars for disclosing registrant data to third parties with a legitimate interest. Whilst this concept is still in very early stages of development, it was welcomed by many stakeholders. Brand owners therefore should keep an eye on this very important topic.

The analysis of all rights protection mechanisms

Another important matter for brand owners is the GNSO (Generic Names supporting Organization)’s Review of all Rights protection Mechanisms (RPMs) in all gTLDs by the PDP (policy development process) Working Group. The working Group is still in phase 1 –  reviewing all RPMs developed for the new gTLD program, including the Sunrise and Trademarks Claims services offered through the Trademark Clearinghouse (TMCH) and the Uniform Rapid Suspension (URS), a dispute resolution procedure similar to the UDRP specifically designed for new gTLDs. At ICANN63, the Working Group met to present its initial survey findings on the TMCH. It also met to present and discuss its initial review of the URS proposals for operational fixes and policy recommendations. The Working Group also discussed the timeline and next steps for developing the Initial Report. It is expected that phase 2, which consists of a review of the UDRP, will begin in mid 2019. The UDRP is one of the most effective tools for brand owners to tackle infringing domain name registrations, and so it is also an important issue for brand owners that needs to be closely monitored.

New gTLD subsequent procedures

Finally, the New gTLD subsequent procedures Working group was created to review the 2012 round of new gTLDs (generic Top-level domains) and identify recommendations. The working group published its Supplemental Initial Report at the end of October 2018, which was open for comment. It covered several topics, including ICANN auctions as a last resort.

Approval given for ‘.amazon’

The ICANN approved the ‘.amazon’ new gTLD despite the opposition of the Amazon Cooperation Treaty Organization (ACTO). In return, the Amazon corporation agreed to implement special measures, so called “public interest commitments”, in order to avoid any confusion between the new gTLD and the Amazon geographical region or with the Amazon Cooperation Treaty Organization.

The approval of ‘.amazon’ as a new gTLD may open the way to a future new gTLD application rounds.

In a decision of 10 July 2018 (no. 16-23694), the judges of cassation clarified the criteria for assessing unfair commercial use as well as the concept of just cause with respect to the usage of a well-known trademark, all within the scope of the disputed employ of the Taittinger surname. The affair opposes a member of the Taittinger family and the company Taittinger CCVC which acquired shares in the family-run company. For the Taittinger family sold all of the shares of this company, which owns a brand of champagne of the same name. One of the clauses in the transfer agreement was a hold harmless clause which stipulated that the members of the family undertook not to use the “TAITTINGER” trademark to designate products that would be in competition with the transferred business, namely the marketing of champagne. Later, one of the members of the Taittinger family filed the trademark “Virginie T” to designate various products and in particular champagne. To promote her activity, the applicant reserved the domain name but also several names reproducing her surname in full, including and . These latter redirect to the website attached to the domain name , where, moreover, the name Taittinger appears a number of times. As a consequence, Taittinger CCVC invoked the use of the Taittinger sign to promote and sell the champagne called “Virginie T” but also the “implementation of communication systematically oriented on the surname” Taittinger and summonsed the owner of the “Virginie T” trademark on the basis of breach of the transfer of securities contract, infringement of the reputed trademark “TAITTINGER” and unfair commercial use

The hold harmless (against the actions of the seller) clause 

While this point does not constitute the heart of the judgement, it nonetheless provides clarification on the scope of a mandate within the framework of the sale of securities. In the case at hand, the owner of the “Virginie T” trademark had mandated her father, with a substitution option, that he had moreover exercised, to sell her shares to Taittinger CCVC. In this respect, the Court of appeal had convicted Mrs Taittinger for having violated the hold harmless clause. The Supreme court of appeal recalled that the mandate encompasses only administrative acts, the agent can do nothing beyond what is included in their mandate. If the sale mandate authorised the agent to “subscribe to any undertaking or guarantee”, this did not imply the power to grant a prohibition or limitation on the principal’s use of the surname insofar as it constitutes a disposal of assets. The Supreme court of appeal therefore censored the judgement of the Court of appeal on this point.

Infringement of the reputed “Taittinger” trademark

One of the two main contributions of the judgement of 10 July 2018 lies in the appreciation of the concept of just cause vis-à-vis the use of a reputed trademark. Taittinger CCVC invoked article L713-5 of the Intellectual Property Code which stipulates that “the reproduction or imitation of a well-known trademark for products or services not similar to those designated in registration engages the legal liability of the author if it could be prejudicial to the owner of the trademark or if this reproduction or imitation constitutes an unjustified exploitation of the trademark”. While the reputation of the “TAITTINGER” trademark is not in dispute, Virginie Taittinger replied however by invoking the exception of just cause taken from article 5, 2° of the European directive 89/104/EEC of 21 December 1999 and in the light of which the French judge must interpret the French legislation. Consequently, the Court of appeal noted that the consumer was led to establish a link between the trademark transferred and invoked and the promotion of the products of Virginie Taittinger. However, the Court of appeal did not convict Ms Taittinger insofar as, recalling her family origin, she was not taking unfair advantage of the reputation of the “TAITTINGER” trademark, nor did she prejudice its distinctive value. The Court had then added that her name sufficed to identify her career path or her past experience, even with added photographs. In its order of 10 July 2018, the Supreme court of appeal therefore censored the judgement of the Court of appeal on this point. The Court emphasised that, in the light of the European directive, article L713-5 must be applied in two stages. The owner of the reputed trademark must first of all demonstrate that unfair advantage had been taken of the reputation of the trademark, then the third party must establish that there is just cause for the use of this reputed trademark, or a similar sign. Consequently, the Court of appeal should not have assessed the unfair advantage taken of the trademark in relation to the possible existence of just cause but should have assessed the unfair advantage once the infringement had been established. The novelty contributed by this judgment therefore resides in the fact, for the Supreme court of appeal, to indicate that the exception of just cause is not an element of the infringement against the trademark noted, but a fact that exonerates and applies once the infringement has been established. No further details were given, however, as to a possible definition or application of the concept of just cause. The fact that a well-known trademark is identical to the surname used by the third party could have been the occasion for the Supreme court of appeal to use this concept and, consequently, to clarify it.

Unfair commercial use

The Supreme court of appeal’s assessment of unfair commercial use in the judgement of 10 July 2018 constitutes its second contribution. In this respect, as recalled by the Supreme court of appeal, unfair commercial use “consists, for an economic operator, of placing itself in the wake of another in order to take advantage, at no expense, of their efforts and know-how, the recognition acquired or investments made”. The Court of appeal had thus also rejected the claims of Taittinger CCVC on the basis of unfair commercial use. According to the judges, the company had not established how adopting a corporate name or a commercial name as such would alone express the efforts and investments, in particular promotional, necessary to establish an act of unfair commercial use. Here again, the Supreme court of appeal therefore censored the judgement of the Court of appeal. According to the judges of cassation, the latter should have taken into consideration the prestige and recognition acquired, and not disputed, of the corporate name and of the commercial name of the company to examine whether or not an instance of unfair commercial use was present in the case in hand.

This judgement is therefore not only to be placed among the affairs dealing with a well-known trademark that is a homonym of a surname, but also provides a better understanding of the use of the concept of just cause in the context of the infringement of a well-known trademark, as well as the criterion of recognition in the framework of what constitutes an instance of unfair commercial use. Taking advantage of the reputation of a trademark does not necessarily therefore constitute infringement of a well-known trademark, but this can be a decisive factor with regard to establishing an instance of unfair commercial use for which there is no exception for just cause.