Fiducial Legal By Lamy
As a member of the European Union and WIPO, France complies with all EU regulations and directives, as well as all the major international treaties concerning IP rights. As such, EU trademarks and designs are protected in all French territory. The French IP Code protects other IP rights (eg, copyright and related rights, patents and utility models).
The IP Code was amended by Law 2014/315 (which entered into force on 13 March 2014) to transpose EU Regulation 608/2013 concerning customs enforcement of IP rights and to strengthen the fight against counterfeiting and infringement. The code was also recently amended by Ordonnance 2019/1169 of 13 November 2019, followed by Decree 2019/1316 on 9 December 2019. The new EU customs regulation 608/2013 and corresponding Implementing Regulation 1352/2013 are thus fully applicable to France and are transposed in Articles L 335-10 (copyright), L 614-32 (patents), L 716-8 (trademarks), L 722-9 (geographical indications), L 623-26 (plant varieties) and subsequent articles of the IP Code.
Where EU Regulation 608/2013 does not apply (ie, where the suspected goods enter or leave one EU member state from or for another EU member state rather than a non-EU country), rights holders can rely on the national provisions of the French IP Code. The French Customs Code also applies to customs and criminal procedures.
The fight against counterfeiting and the defence of IP rights, specifically blocking the introduction of counterfeit goods and their sale on the internal market, requires surveillance both within national territories and at EU borders.
According to Europol and the EUIPO’s 2017 Situation Report on Counterfeiting and Piracy in the European Union, border defence is still considered to be far more effective than detaining goods that are already circulating. To this end, French Customs plays a strategic role through its presence at France’s borders, airports and ports, as well as its ability to act anywhere on French territory, including France’s overseas departments and territories. Effective border control is possible thanks to French Customs’ extensive inspection and investigation measures for searching and examining goods, transport and persons, including the right to communication of all commercial documents.
Businesses importing or exporting goods into or out of the European Union are required to use an Economic Operator Registration and Identification (EORI) number in all customs procedures. The purpose of the EORI system is to standardise the registration of economic operators in accordance with Article 9 of the European Union’s Uniform Customs Code.
Customs watch application
Both EU Regulation 608/2013 and the French IP Code provide for border enforcement measures under which a rights holder or an exclusive licence holder may request that Customs watch imports and detain goods suspected of infringing IP rights. The resulting customs watch is valid for a one-year period (renewable) and covers goods imported into French territory from other EU member states as well as goods imported from outside the European Union.
Once the customs watch is in place, Customs will detain suspected infringing goods and alert the rights holder as to the nature and quantity of the goods. The rights holder must then confirm within 10 working days (or three working days in the case of perishable goods) that the detained goods are indeed counterfeits and either request the destruction of the seized goods or commence legal proceedings against the importer.
During the detention period, the rights holder or an authorised third party may request, for the strict purpose of bringing legal proceeding against the importer:
- a sample of the detained goods for analysis; and
- the name and address of the consignor, importer and consignee or holder of the detained goods.
Communication of this information forms an exception to the customs authorities’ duty of professional secrecy as provided for by Article 59bis of the Customs Code.
Unlike other EU jurisdictions, in France such information may only be used to initiate legal proceedings. If the information is used for other purposes, Customs may abrogate, suspend or refuse to renew the customs watch.
Failure by the rights holder to confirm the counterfeiting nature of the goods and initiation of legal proceedings within the 10-day limit will result in Customs releasing the goods, although the period may be extended by an additional 10 working days at the request, duly justified, of the rights holder or authorised third party.
As a result of the EU-wide customs measures put in place by EU Regulation 608/2013 and the explosion of seizures of suspect goods at the French border, French Customs now invoice the rights holder for the costs incurred in seizing, handling, transporting and destroying suspected infringing goods pursuant to a customs watch application.
In addition to the standard customs watch, the rights holder may request an accelerated seizure and destruction procedure for infringing non-perishable goods sent in small packages. Suspected counterfeit goods sent by post or courier weighing not more than 2 kilograms and containing fewer than three items may be seized and destroyed by Customs unless, within 10 working days, the goods’ owner expressly refuses to consent to their destruction; silence being taken to imply consent. Where consent is refused, the rights holder must follow the standard destruction procedure.
Ex officio customs seizure
In the absence of a customs watch application, French Customs may automatically detain any non-perishable goods suspected of infringing IP rights for up to four working days. The goal of this ex officio seizure procedure is to permit the rights holder to file an application for customs intervention. Failure to do so within the time limit will result in Customs immediately releasing the seized goods back onto the market.
EU Regulation 608/2013 does not set out any provisions likely to render ineffective the European Court of Justice’s (ECJ) Nokia case law (1 December 2011, Nokia and Philips, C-446/09 and C-495/09, EU:C:2011:796). Since that decision, EU Customs has been prohibited from seizing infringing merchandise merely transiting through EU territory to be marketed outside the European Union, in the absence of concrete evidence that these non-community goods were, or were about to be, the subject of a “commercial act directed at European Union consumers, such as a sale, offer for sale or advertising” (Point 57). This decision has had a severe chilling effect on the number of products stopped by French Customs in EU territory.
The EU legislature has taken measures to balance the ECJ’s interpretation by adopting the trademark reform package including EU Regulation 2017/1001 (replacing amending Regulation 2015/2424) and EU Directive 2015/2436.
Article 9(4) of the EU Regulation 2017/1001 and Article 10(4) of the EU Directive 2015/2436 now provide that the owner of a trademark will: “also be entitled to prevent all third parties from bringing goods, in the course of trade, into the Union without being released for free circulation there, where such goods, including packaging, come from third countries and bear without authorisation a trademark which is identical with the EU trademark registered in respect of such goods, or which cannot be distinguished in its essential aspects from that trademark.”
Seizure of such goods by French Customs can therefore be challenged only if the declarant or owner of the products proves that the trademark owner has no right to prohibit the marketing of these goods in the country of final destination. These provisions therefore reverse the burden of proof as set out in Nokia. Accordingly, Article L 713-3-2 of the IP Code also provides for a clear prohibition against the introduction of infringing goods in transit.
In a 7 March 2018 decision, the French Supreme Court highlighted the autonomy of customs procedures, pointing out that Customs may seize infringing goods on the basis of a customs offence, even if the IP rights holder confirming the infringing nature of the goods has not brought any civil or criminal action for infringement or lodged a complaint with the public prosecutor within the timeframe provided by the IP Code. As customs violations form an independent class of offences, they are sufficient in themselves to justify the seizure of the goods by the customs administration (Cass com, 7 March 2018, 16-24.851).
An IP rights infringement may be sanctioned by way of either a civil or a criminal action. Criminal proceedings are not the most favoured option for rights holders; however, criminal penalties are usually considered to be more dissuasive for infringers. The criminal process in France is inquisitorial, meaning that in many cases (except for minor offences) an examining magistrate plays an active role in the conduct of the investigations and is responsible for preparing the case for trial. Criminal investigations are performed by the criminal investigation department or Customs under the authority of the public prosecutor or an examining magistrate.
Criminal proceedings may be initiated by the public prosecutor either directly (which is rare in IP matters) or following a seizure by Customs or a criminal complaint filed by the rights holder.
Where a trademark offence is found to have occurred, the offender may be sentenced to four years’ imprisonment (seven years in certain circumstances) and issued with a fine of up to €400,000 (or €750,000 in certain circumstances). Criminal courts may also order the removal of infringing goods from commercial circulation at the offender’s expense, the total or partial closure of the premises used to commit the offence, and the publication of the judgment. Article 414 of the French Customs Code also provides that customs penalties can be increased to up to 10 years’ imprisonment and a fine up to 10 times the value of the infringing goods in the event that the offence is committed by an organised criminal group.
Moreover, damages may be obtained by the rights holder if it brings a civil complaint and takes part in the criminal proceedings. However, damages in criminal proceedings are significantly lower to those awarded by civil courts.
In France, trademark infringement proceedings must be brought before specialised courts. In total only 10 courts in France have jurisdiction in IP matters, while the Paris District Court has exclusive jurisdiction over actions involving patents, EU trademarks and EU designs. The rights holder (or exclusive licensee, if it is authorised to do so) can file an action for infringement within five years from the day on which the rights holder knew, or should have known, of the events entitling it to initiate legal proceedings.
The seizure operation known as ‘saisie-contrefaçon’ is a highly efficient means to prove infringement in France. This pre-trial procedure allows rights holders to obtain an ex parte court order from the president of the court with jurisdiction authorising a bailiff, with the assistance of police officers if required, to collect evidence of the infringement (eg, from the alleged infringer’s premises, a shop, Customs or a trade fair). Simultaneous seizures are sometimes necessary, and coordination is therefore required to preserve the element of surprise.
As it is an ex parte proceeding, the manner in which the bailiff may conduct the operation is strictly circumscribed by law. In this respect, French courts regularly invalidate seizures where the bailiff does not strictly respect the court’s order. During the seizure, the bailiff is usually permitted to collect samples of the allegedly infringing goods, as well as related commercial documents (eg, invoices, catalogues and brochures). The bailiff may also, with express authorisation from the judge, seize the entire stock of allegedly infringing goods.
The rights holder must thereafter bring a civil or criminal infringement action within 20 working days (or 31 calendar days) from the date of seizure under penalty of the latter being declared void.
Rights holders may request the specialised IP courts to grant preliminary injunctions with the aim of preventing acts of alleged infringement. In order to obtain such measures, the complainant must provide evidence demonstrating the plausibility of the infringement occurring.
Depending on the degree of urgency, the complainant may choose to request preliminary injunctions through the référé d’heure à heure or référé procedures (interlocutory applications), both of which are adversarial procedures. Preliminary injunctions may be granted within a few weeks, in case of a référé d’heure à heure, and within a few months in case of a référé. In rare circumstances, the rights holder may request injunctions ex parte through the requête procedure (urgent interlocutory application), in which case a decision is rendered within a few days.
Preliminary measures are immediately enforceable and are usually ordered subject to penalties. Courts may order precautionary seizure of the alleged infringing goods or provisional prohibition in addition to the payment of provisional damages. These injunctions may be obtained against the alleged infringer, but also against intermediaries (eg, a transporter, e-platform or internet service provider (ISP)) even though the action on the merits is in fact aimed at a different alleged infringer.
These preliminary proceedings may be initiated either before or after commencing the principal action. If obtained before a proceeding on the merits is initiated, the rights holder must file its principal action within 20 working days (or 31 calendar days). Otherwise, all preliminary measures will be revoked and the would-be claimant exposed to the risk of an order for payment of damages.
Remedies are available to rights holders regardless of whether the infringement is intentional, direct or contributory. Punitive damages, however, are not available under French law.
French courts consider the following criteria when determining the amount of compensatory damages to award:
- the negative or detrimental economic consequences of infringement (ie, the material losses and loss of earnings suffered by the rights holder);
- the moral or non-pecuniary harm (ie, harm to the trademark’s distinctive character, renown or prestige); and
- the financial benefit realised by the infringer.
As an alternative, at the rights holder’s request, the court may set damages as a lump sum. The lump sum must be greater than the royalties that would have been owed if the infringer had sought a licence from the rights holder. This amount is not exclusive of compensation for non-pecuniary harm caused to the rights holder.
Memoranda of understanding, good practice guides and public campaigns are among the many soft-law measures that may be put in place by trademark associations, brand owners and even online marketplaces in order to tackle online counterfeiting on a global scale. These initiatives are available in addition to the traditional means of action taken by brand owners or law enforcement authorities through customs intervention and civil and criminal proceedings. ISPs may be held liable for IP infringement if it is proven that the ISP has played an active role (ie, has contributed to the infringing act). If the ISP has only participated in a passive manner, it nonetheless risks being held liable under the Act on Confidence in the Digital Economy (21 June 2004) if, on receipt of notification from the rights holder that certain content is unlawful, the ISP fails to remove that content or to disable access to it promptly.
In France, brand owners and certain online platforms have signed a charter to fight counterfeits online (16 December 2009), which organises cooperation between brand owners, online platforms, law enforcement authorities and helps to implement preventive measures (eg, technical detection measures) and active measures (eg, notification procedure from brand owners). The National Institute of Industrial Property, in collaboration with the National Anti-counterfeiting Committee, is the authority monitoring the application of this agreement.
On 26 March 2019, a charter was signed by major French online platforms to improve the relationship between those marketplaces and small and medium-sized companies. The charter also aims at making the fight against counterfeiting more efficient by putting in place a reporting process allowing sellers to alert the platform of any counterfeiting item that they may encounter on that platform. It will then be up to the platform to take all necessary measures to cease offering those items to the public. Unfortunately, although they took part in the drafting process, a number of major international actors did not sign the charter.
At the EU level, many initiatives and good practices have also been taken to address the challenges of online and offline counterfeiting, including the creation of the Intellectual Property Crime Coordinated Coalition (IPC3) in July 2016, located at Europol and funded by the EUIPO. The IPC3 provides operational and technical support to law enforcement agencies in the European Union and overseas. Among other activities, it:
- facilitates and coordinates cross-border investigations;
- monitors and reports online crime trends and emerging modi operandi;
- raises public awareness of this type of crime; and
- provides training to law enforcement officers on how to combat it.
One of the most effective measures available in France is the customs watch, outlined above. This process is easy to implement and free, at least until the rights holder requests destruction of infringing goods.
In general, all preliminary measures should be considered as strategic tools before any measure is decided on the merits. Opposition or cancellation actions brought against infringing trademark applications or registrations, or UDRP proceedings against domain names filed in bad faith, are also an effective means by which to prevent future infringement from the moment of filing or registration.
Moreover, certain luxury brands have set up operational cooperation with customs authorities in countries particularly affected by the import and sale of infringing goods, or even directly via online sales websites.
Similarly, soft law can be an alternative to the legal fight against counterfeiting. Awareness campaigns organised by luxury and fashion houses, as well as charters such as those signed in 2009 and 2019 by certain online platforms, have anchored the fight against counterfeiting in the French commercial and public landscape.