Law implementing IP Rights Enforcement Directive enters into force

The law implementing the IP Rights Enforcement Directive (2004/48/EC) has come into force.

The new law was published on October 29 2007 and entered into force the following working day. The law modifies the Intellectual Property Code and harmonizes (although not entirely):

• the fight against the infringement of IP rights; and
  
  
• the computation of damages.

Certain practical or specific issues which are absent from the law (eg, the computation of the relevant time periods) will be addressed in a decree which is yet to be published. The new law includes certain procedures which were already available in France, as well as other procedures inspired by best practices existing in other EU countries.

In cases of infringement, evidence was, and still is, collected in ex parte proceedings called saisie contrefacon. These proceedings now also allow the seizure of the equipment and tools used to manufacture and/or distribute the infringing goods. Further, the new law includes a practice (which has previously been challenged in court) whereby the relevant accounting documents may be seized. In contrast to the previous law, the seizing party might be required to provide certain guarantees to the owner of the goods.

Moreover, it is no longer compulsory to initiate proceedings on the merits in order to obtain a decision in summary proceedings in trademark matters. A summary decision may now be granted if the plaintiff provides evidence that its rights are being infringed or may be infringed in the future.

Furthermore, a party may now request a summary decision in ex parte proceedings, but only where the circumstances render it necessary. It is expected that the courts will be cautious in granting such requests in order to protect the rights of the defence and comply with the rules of the European Convention on Human Rights. A summary decision may be requested in order to:

• prevent the continuation of the infringing acts;
  
  
• obtain a guarantee of indemnification;
  
  
• prevent the release of the infringing goods in the market; and
  
  
• obtain a lien on the assets of the alleged infringer.

In addition, the new law modifies customs proceedings. It is now possible to detain goods originating from non-EU countries and destined for non-EU countries for a 10-day period. During this period, trademark owners may initiate summary proceedings or proceedings on the merits.

Under the new law, only certain courts of first instance (tribunaux de grande instance) have jurisdiction over IP cases. Since the Paris Court of First Instance is the only court with jurisdiction over Community trademark matters, and since this court has exclusive jurisdiction over design rights under the new law, it is assumed that the Paris Court of First Instance will hear most IP cases. A plaintiff may request that the court order the infringer or third parties to disclose information. The court can reject such request if there is a legitimate reason (empêchement legitime). As this procedure is not covered by the law and will not necessarily be addressed in the implementing decree, the court will have to:

• define the scope of the 'legitimate reason' exception;
  
  
• clarify the circumstances in which such requests may be made; and
  
  
• specify which judges may decide on such requests.

The law also introduces new rules on the computation of damages which are in line with the directive. Under the previous law, damages aimed to "repair the loss, all the loss, but only the loss". In contrast, in computing damages the courts must now take into consideration:

• the negative economic consequences;
  
  
• the moral damages; and
  
  
• the profits obtained by the infringer.

If damages cannot be computed based on these rules, the plaintiff may request compensation in an amount calculated based on the royalties that the infringer would have paid to the plaintiff had the infringer obtained a licence.

In addition, the law introduces the possibility to recall infringing products. However, the recall procedure is not covered by the law and must thus be clarified by the courts or the judges in charge of enforcing decisions (juges de l'exécution). The law also regulates the destruction of infringing goods.

The amendments introduced by the law apply to both civil and criminal cases.

Finally, a significant new feature - which does not stem from the directive - is that infringing acts involving goods which are dangerous to human and animal health and safety will be punished by increased criminal sentences.

Richard Milchior, Granrut Avocats, Paris