Senate examines and amends new anti-counterfeiting bill

The Senate has examined and amended a new bill against counterfeiting. The bill was drafted by the government in February 2007; it implements the EU IP Rights Enforcement Directive (2004/48/EC), which aims to improve the tools for the fight against counterfeiting.

The bill contains a new definition of 'counterfeiting acts' which includes "counterfeiting on a commercial scale" - that is, any infringement committed with a view to obtaining an economic or commercial advantage, either directly or indirectly.

The main innovation is the introduction of a right of information. The aim is to allow applicants to obtain the information necessary to dismantle counterfeiting rings. Under the bill, judges can order counterfeiters to provide information on the quantities and prices of the products, and on prior and future owners.

The bill also aims to strengthen procedures, especially with regard to seizure and provisional measures. The bill allows the seizure and/or destruction of devices and apparatus used for the manufacture of counterfeit goods. It also extends the deadline (currently 15 days) for filing a court action after the seizure of the goods.

Moreover, it will be possible to obtain provisional measures (eg, protective seizure of personal or real property, or freezing of bank accounts) against the counterfeiters themselves or middlemen before the action on the merits.

The bill also aims to increase financial compensation. The judge will be able to order the removal from sale of the products at the expense of the counterfeiter. The judge will also be able to compensate the plaintiff for its moral prejudice and penalize the counterfeiter. Under the bill, the judge can order that the counterfeiter pay a lump sum as damages. The sum is calculated based on the royalties that the counterfeiter would have paid to the legitimate owner had the owner given its consent to the counterfeiter to use its trademark.

The Senate approved the main features of the bill. However, it disagreed with the definition of 'counterfeiting acts' and found that the notion of 'counterfeiting on a commercial scale' was too vague.

Moreover, the Senate added new elements to the bill, in particular:

• Increase in the penalties imposed for the counterfeiting of products threatening consumers' security and health - the Senate proposed to penalize criminally the counterfeiting of products by organized criminal groups and the counterfeiting of products posing a risk to the health or safety of consumers (eg, pharmaceuticals, toys, sunglasses and car parts).
  
  
• Specialization of courts and judges - the Senate proposed to concentrate competences in a few specialized courts. It also suggested that judges specialize in IP matters.
  
  
• Extension of the competences of the customs services - the Senate proposed to allow the seizure of counterfeit goods in transit (ie, which are not intended for the French public) and to improve the customs procedures.
  
  
• Enforcement of the powers of public institutions (eg, the General Directorate for Competition, Consumption and Prevention of Fraud and anti-money laundering cells).
  
  
• Increase in the responsibility of internet service providers, as these play an important part in the distribution of counterfeit products.

These developments have been followed with great interest in France. If enacted, the bill would bring about significant and positive changes, providing companies and public bodies with new and powerful tools in their fight against counterfeiting.

Séverine Fitoussi, Inlex Conseil, Paris