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On March 2011, EU Patent system gets the go-ahead, and the enhanced cooperation procedure will be used. Said procedure allows groups of Member States to integrate policies further, even where others Member States do not agree. In short, it permits to avoid deadlock. Spain and Italy have chosen not to participate in the system because Italian and Spanish are not recognized as official languages. It seems that Italy, but also Spain might slowly abandon its resistance.

The EU patent package includes an EU regulation covering the Unitary Patent, its language regime and an international agreement on the Unified Patent Court. An EU patent will permit to obtain simpler, cheaper and more expedient patent for companies and individuals to get EU-wide protection for their inventions. EU patent will promote small and medium-sized enterprises (SMEs) innovation. Nowadays, it’s ten times more expensive to obtain national patent than a US patent. Thus, the agreement is a major step for EU industry’s competitiveness.

According to the Polish Presidency of the Council, “the compromise was broadly accepted in substance – but further work is still needed”. After the Competitiveness council in Brussels on December 5, 2011, only the seat of the Central Division of the Unitary Patent Court needs to be decided. Three candidates compete for the seat of this main litigation court: Paris, the UK and Germany. The seat of the second Instance Court of Appeal will be in Luxembourg. Lisbon and Ljubljana are set for the seat of Arbitration and mediation center.

The legal Affairs Committee validated on the agreement on December 20, 2011. Next step before the agreement comes into force, it must be endorsed by the full Parliament, possibly during the plenary session in February.

To be follow…

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A pharmaceutical laboratory which copies one of his competitor’s product’s packaging for a same market place not only commits unfair competition act but also free riding. As the Paris Court of Appeal said: “this breaks the equality between the various competitors, distorts normal market, causing a disturbance to business”.

After underlining the importance of the user’s information and the need to look for the risk of confusion, the Court reminds that a well-based unfair competition action is valued via evidence arrays. However, the Court of Appeal partially invalided the judgment of first instance which considered that the competitor didn’t commit free riding. Indeed, according to the Paris Court of Appeal: “the appellant, substantially drawing from his competitor’s product’s packaging […] appropriated an individual economic value and the result of research and specific design work, providing a competitive advantage”.

So, free riding is invoked in France even if the two laboratories are competitors on the same market place. Copying a product’s packaging really constitutes unfair competition but it seems useless to consider the free riding theory which is a sanction of taking over others’ reputation without any potentially common market.

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December 6, 2011 marks a turning point for the domain names with the extension “.fr”. Indeed, the French Association for Internet Naming in Cooperation (AFNIC) issued the holder of a domain name with new registration rules for French extensions. The new naming policy for French network information center (1) published on November 25, 2011, entered into force yesterday.

Those eligible for registration or renewal of a domain name with an extension “.fr” before, are not the same today.

Indeed, only natural persons residing or having their corporate seat or principal place of business in the territory of one member States of the European Union, or the territory of Iceland, Liechtenstein, Norway, or Switzerland will now be eligible for registration of a domain name with the extension “.fr”.

Therefore these new conditions restrict the access of people living outside the European Union or countries covered by the new naming policy for French network information center. However, persons who already held domain names with the extension “.fr”, will be eligible for renewal of their domain names.

An initial assessment conducted on December 6, 2011 at 1:30 pm, counted 3500 records from 70 registrars. The domain names’ owners are divided up into France at 62% (Reunion Island at 9%, Germany at 13%, the UK at 6%, Belgium at 3%, Italy at 2% (2) …

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(1) AFNIC, Charte de nommage de l’Association Française de Nommage Internet en Coopération, Règles d’enregistrement des extensions françaises, http://www.afnic.fr/medias/documents/AFNIC-charte_2012_.pdf
(2) Premier bilan de l’ouverture à l’Europe des .fr, wf, .re, .yt, .pm, .tf, http://www.afnic.fr/fr/l-afnic-en bref/actualites/actualites-generales/5439/show/premier-bilan-de-l-ouverture-a-l-europe-des-fr-wf-re-yt-pm-tf.html

We have the pleasure to announce the publication of the book « Trademarks and Internet » by Nathalie Dreyfus. This book offers an analysis of the evolution of French and International laws related to the protection and the defense of trademarks on the Internet in both Web 1.0 and Web 2.0 levels. It is available as from December 8, 2011.

After discovering on October 11, 2011 that their administrative rights on their Facebook page did no longer exist, the German drug maker Merck KGaA began legal action against Facebook.

The German firm has since filed a petition (1) to allow pre-action disclosure with the Supreme Court of the state of New York. Merck KGaA intends to demand details as to why Facebook will not allow them to use the “facebook.com/merk” username for their Facebook page: “Facebook is an important marketing device, the page is of great value to Merck” (2).

If any clear information had been provided about what happened, the said webpage is now used by the German firm’s US rival Merck & Co. In spite of Merck KGaA entering into an agreement with Facebook for its exclusive use in March of last year, the page on the social-networking site is filled with content related to the U.S. compagny. The Merck KGaA counsel exposes that: “Merck is considering causes of action for breach of contract, tortuous interference with prospective business advantage, and/or conversion. Merck requires pre-action disclosure from Facebook to determine the nature of the misconduct, to frame the pleadings, and to identify the proper defendant or defendants” .

This action based on an apparent takeover of a Facebook page is enlightening in two major ways. First, it confirms that social media usernames are today as important as domain names or trademarks. Second, this calls attention to a legal blur in this area: UDRP (Uniform Dispute Resolution Policy) rules don’t apply to social media URLs yet. Indeed, the decision to declare that a username would have been usurped or not will only lie on Facebook.
It is worth noting that the two Mercks became separate companies under the Treaty of Versailles, as part of Germany’s reparations after World War 1, each owning rights on the Merck’s trademark in different geographic areas.
To be continued…

(1) New York State Supreme Court, New York Country (Manhattan), Index Number Search: 11113215-2011
(2) Ibid

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New type of outsourcing of computing resources which enables to access, via Internet and by means of a simple web browser, multiple services, the Cloud computing constitutes a major economic stake but also raises new questions, notably regarding personal data protection.

The debate launched by the French data protection authority (CNIL) is to define the concept of Cloud computing. In this respect, the CNIL believes that any definition should be based on the features specific to Cloud Computing.

The CNIL is also concerned with the qualification of stake holders. Although the service provider is usually qualified of a subcontractor or data processor, the CNIL wonders if, in some cases, both the client and the service provider should be jointly qualified data controllers. For instance, the CNIL refers to the necessary assessment of the extent to which the service provider controls the data.

The question of the identification of the applicable law is addressed to stakeholders. Especially, regarding the criterion of the “processing means”, the CNIL whishes to know which other criteria would enable the determination of applicable law.

The CNIL also addresses the issue of instruments which could provide a framework to regulate data transfers to non-EU third countries failing to provide any adequate protection. In this regard, the CNIL suggests the use of Binding Corporate Rules, especially in the field of subcontracting, which is bound to know a great development in the next few years.

Beyond the problematic of the personal data transfers, the CNIL raises questions about security, especially confidentiality and reversibility, and wonders how those requirements should be materialized in contracts. It also addresses the issue of risk assessment before switching over to Cloud computing.

The replies to the call for contributions are expected for November 27, 2011. There is no doubt the CNIL is bound to play a critical role in the interaction between Cloud computing and personal data protection.

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Manwin Licensing International company just sued the ICANN and ICM Registry for antitrust violations. ICM Registry is the sole operator of the .XXX registry. In its complaint filed on November 16, 2011, Manwin denounced their union which would have the effect of eliminating competitive bidding and reducing the market for .XXX registry services. Manwin also evokes the hostage-taking of trademarks owners who had to make defensive registrations to fight against cybersquatting. It would affect both competition and consumers. In addition, without any other authorized operators of the .XXX registry, the price for “defensive registration” is high set and the profit for those registrations is expected to be $200 millions in annual.

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Following a decision from the French Competition Authority sanctioning Pierre Fabre Dermo-Cosmétique on October 29, 2008, the later lodged an appeal. The Court of Appeal of Paris addressed a reference for a preliminary ruling to the ECJ to know whether a total and absolute prohibition on selling contract products on the Internet, imposed on selected distributors within the framework of a selective distribution network, constitutes an infringement of Competition law of the European Union. Pierre Fabre Dermo-cosmétique manufactures and markets cosmetics and personal care products. In the agreements with distributors, a clause required sales to be made exclusively in a physical space, in which a qualified pharmacist must be present.

On October 13, 2011, the ECJ (1) confirmed the French Competition Authority decision.

First of all, the ECJ stated that a clause in a selective distribution contract banning the distributors of the company Pierre Fabre Dermo-cosmétique from selling its products online amounts to a restriction on competition by object (2), unless that clause is objectively justified, in particularly regarding to the properties of the products at issue. From there, the ECJ held that the clause requiring sales of cosmetics and personal care products to be made in a physical space where a qualified pharmacist must be present is not objectively justified in the context of the sale of non-prescription medicines.

Then, such a ban may be the object of an exemption. As to whether a selective distribution contract may benefit from the vertical block exemption (3), the ECJ held that the provisions of the vertical block exemption could not apply to a selective distribution agreement which contained a clause prohibiting de facto the use of the internet as a method of marketing the contractual products. However, such contract may benefit from the individual exemption (article 101.3 of the TFEU) provided that the conditions of that provision are met. This element will be decided upon by referring French Court of Appeal. Its decision is expected in the course of the first semester of 2012.

(1) ECJ, 13 oct. 2011, aff. C 439/09, Pierre Fabre Dermo-Cosmétique c/ Président de l’Autorité de la concurrence e.a.
(2) Art 101 of the TFEU (Treaty of the Functioning of the EU of 1st December 2009
(3) Commission Regulation (EC) No 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices (OJ 1999 L 336, p.21).

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Since October 24, 2011, OHIM offers a mediation service in parallel to proceedings of appeal before the Board of Appeal. Said procedure allows the parties to reach an amicable settlement and suspends the appeal proceedings.

Mediation talks will normally be held in Alicante and the service itself is offered free of charge. A one-off fee is charged in the event that the parties wish to hold the mediation talks in Brussels in order to cover the traveling expenses of the mediator.

Mediation provides a swift and less costly alternative to litigation. It aims at bringing the parties together and assisting them in finding common ground on which a potential settlement may be made. The subject-matter of the mediation may, however, go beyond the scope of OHIM appeal proceedings and embrace future and present commercial and economic interests of the parties.

A team of eight qualified mediators has been drawn from various parts of the Office. They are all very experienced staff of the Office who underwent special training with the Chartered Institute of Arbitrators (CIARB) in London. Their CVs are published on the OHIM website so that the parties can require the services of a mediator in particular.

The parties retain control over the way the procedure is handled and its outcome. If the mediation fails, the appeal proceedings will resume from the point reached prior to the mediation. The mediator will never be involved in the appeal proceedings and is bound to keep the substance of the mediation confidential. Further, no record or files pertaining to the mediation will be retained by OHIM.

Depending on the success of this new service, the Office could consider to widen its scope to other appropriate stages of inter partes disputes. To be continued!

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The Electronic Communication French Minister of has just approved the new dispute resolution system developed by AFNIC. Its name is Syreli.

The new procedure will come into force as from November 21, 2011 for .fr and .re extensions. It will come into force as from December 6, 2011 for the other extensions managed by AFNIC.

The details of the procedure can be summarized as follows:
• The domain name must have been created or renewed after July 1, 2011;
• The decision is based solely on the documents and statements filed by both parties;
• The procedure lasts about 60 days;
• The decision is rendered by a 3 member panel;
• The decision can reject the complaint, cancel or transfer the domain name;
• The decision will be suspended if a judicial procedure is initiated 15 days as from the decision;
• The examination fee is €250 excl. VAT. It is paid by complainant.

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