Paris court issues guidance on generic marks

In DivX Inc v Demsaz (December 2 2008, only recently published), the Paris Court of First Instance has held that the mark DIVX was distinctive at the time of registration and had not become customary in the trade with regard to certain computer programs.
US company DivX Inc produces a computer program for the compression of video files. It registered the trademark DIVX in France on June 20 2003. DivX alleged that Akai Sales Pte Ltd,through its French distributor Demsaz, had sold audiovisual products bearing the mark DIVX without authorization. DivX thus filed an action for trademark infringement before the French Courts. 
As a counter-argument, Akai claimed that at the time of registration of the DIVX mark, the term 'DivX' was a customary designation for file compression systems and thus lacked distinctiveness. Akai also argued that, since the date of registration, the mark had become generic in respect of file compression systems.  
The Paris Court of First Instance held that infringement had occurred and rejected Akai's arguments. According to the court, even though DivX had largely distributed its computer programs under the mark DIVX before registering it as a trademark, extracts from Wikipedia and press articles showed that the term 'DivX' was used by DIVX solely and exclusively to designate its products. The court pointed out that other terms were being used by competitors as of the registration date to designate compression programs (and were still in use).   
The court considered that the evidence submitted by Akai (which referred to 'DivX' as the appropriate term to designate compression programs) was insufficient to prove that the term had become customary. The court pointed out that with a market share of 94%, DivX had no obligation to exert absolute control over third-party use of its trademark.  
Under French trademark law, a mark may become generic where the owner has:
  • used the mark as a generic designation for its products and/or services (ie, not as a source identifier); or
  • allowed third parties to use it in such a way.
From the perspective of trademark owners, it is often difficult to decide when to put an end to third-party use of their marks in a generic way. If a trademark owner does not take action against such third-party use, there is a risk that the trademark will be revoked. However, the present case illustrates that trademark owners are not obliged to take action against each and every use of their marks in a generic manner. Trademark owners need only demonstrate that they have used their best efforts. In the case of a well-known trademark, it is likely that the trademark owner will not have taken action against each and every use of its mark by third parties.
However, in Jeannin v SFR SA (Case 2006/17689, December 5 2008), the Paris Court of First Instance stated that the owner of the trademark HOT SPOT was required to demonstrate that it had taken serious action against third-party use of its mark to avoid cancellation on the grounds that the mark had become customary in the trade.    
Trademark owners may take various measures to prevent their marks from becoming generic, including:
  • monitoring the Internet and domain names;
  • adding the TM or ® symbols to their marks;
  • monitoring use of their marks in dictionaries; and
  • making brand announcements or issuing warnings in journals and magazines.
Franck Soutoul and Jean-Philippe Bresson, INLEX IP EXPERTISE, Paris

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