City of Paris ordered to change name of car-sharing scheme

In December 2011 the City of Paris launched a car-sharing scheme called Autolib', based both in name and in nature on a pre-existing bicycle-sharing scheme called Vélib'. In a ruling of June 29 2012, the Paris Court of Appeal held that this choice of name constituted trademark infringement.

In 2001 French car rental company Europcar created a subscription-based car rental service under the name AutoLiberté, which was registered as a French trademark in Classes 12, 16 and 39 of the Nice Classification. At the end of 2008 Europcar discovered that Paris City Hall had registered the French trademark AUTOLIB' in preparation for the future launch of a car-sharing scheme. The name and nature of this scheme was intended to mirror the Vélib' scheme, a very successful bicycle-sharing programme operating in the city of Paris since 2007.

Europcar International and Europcar France brought a court action against Paris City Hall, alleging trademark infringement and unfair competition.

At first instance, the Paris Court of First Instance dismissed Europcar's trademark infringement claim (judgment of March 11 2011). The court considered that AUTOLIBERTE had a weak distinctive character. The court held that, even though the two signs shared certain visual and phonetic similarities, there was no risk of confusion since:

• the degree of similarity was low; and
• the trademark AUTOLIB' did not contain the word 'liberté' (meaning 'freedom' in French), but only the syllable 'lib' with an apostrophe, making an obvious reference in the mind of the average consumer to the pre-existing bicycle-sharing scheme Vélib'.

Europcar filed an appeal against this decision.

The Paris Court of Appeal first analysed Paris City Hall's counterclaim, according to which the AUTOLIBERTE mark should be cancelled for lack of distinctiveness. Paris City Hall claimed that the terms 'auto' (meaning 'car' in French) and 'liberté', as well as their combination, were descriptive of the car rental service designated by the trademark.

The Paris Court of Appeal rejected this counterclaim, stating that the mark AUTOLIBERTE:

• did not designate or describe a specific type of service;
• was not necessary to name a car rental service; and 
• was not exclusively descriptive of the characteristics of this type of service.

The Court of Appeal referred to the decision of the Court of Justice of the European Union in BABY-DRY (Case C-383/99), holding that the neologism AUTOLIBERTE did not designate car rental services in the common language and was used to refer to different types of services or products. Therefore, the mark AUTOLIBERTE would not be immediately understood and perceived by the general public as designating exclusively a car rental service. Therefore, it was distinctive.

Interestingly, on June 23 2011 the Court of First Instance of Lyon issued a contradictory ruling on the exact same issue. In a similar case opposing Europcar to a company called Lyon Parc Auto, the court found that the trademark AUTOLIBERTE was invalid: it lacked distinctiveness due to the common association made between cars and the concept of freedom, and due to the absence of arbitrary character of the mark.

In the present case, the Court of Appeal then analysed Europcar's claim of trademark infringement. While the First Instance Court had surprisingly considered that there was no need to examine the identity or similarity of the services designated by the marks because of the low degree of similarity between the two signs, the Court of Appeal clearly reiterated that:

• the assessment of the risk of confusion must take into account the interdependence of these factors; and
• a low degree of similarity between the marks can be offset by a high degree of similarity between the products and services, and conversely.

The court thus reaffirmed the necessity to examine the identity and/or similarity of the services, and found that the services at issue were identical or highly similar.

In its defence, Paris City Hall argued that:

• AUTOLIBERTE had a weak distinctive character; and
• no risk of confusion existed among the average consumers, especially since the AUTOLIB' mark was an obvious reference to the pre-existing bicycle-sharing scheme Vélib'.

While the Court of First Instance had upheld this defence, the Paris Court of Appeal considered that both signs were highly similar and observed that consumers generally pay more attention to the beginning of a word mark than to the end.

Further, the Court of Appeal noted that the syllable 'lib' would be necessarily perceived by consumers as the contraction of the word 'liberté' and that the service offered by Paris City Hall made a clear reference to the concept of freedom. As a result, the court considered that both signs were visually, phonetically and conceptually similar, since both contained a combination of the words 'car' ('auto') and 'freedom' ('liberté'). As a result, there was a risk of confusion among consumers, who might believe that the trademarks were affiliated and that the services shared a common origin.

The court then considered Paris City Hall's argument that the trademark VELIB' was well known and that the AUTOLIB' mark would be understood by consumers as a variation of the VELIB' mark. The court found that the risk of confusion could not be eliminated by this sole fact, since consumers could still believe that the services covered by the marks AUTOLIBERTE and AUTOLIB' shared a common origin.

The Court of Appeal thus overturned the decision of the Paris Court of First Instance, holding that:

• the AUTOLIB' mark imitated the earlier trademark AUTOLIBERTE; and
• Paris City Hall had infringed Europcar's trademark rights by registering and using the mark AUTOLIB'.

However, the Court of Appeal rejected Europcar's additional claim of unfair competition, as there was no evidence demonstrating that Paris City Hall had tried to position itself in the wake of Europcar in order to profit from its investment.

As a result of the trademark infringement, the Court of Appeal ordered Paris City Hall to change the name of all 1,800 cars, docking stations and subscriber cards, and withdraw any advertisement for its car-sharing scheme. While Europcar has announced its willingness to reach an agreement with Paris City Hall following this decision, it is most probable that this case will be brought before the French Supreme Court.

Jean-François Bretonnière and Thomas Defaux, Baker & McKenzie, Paris