Procedures and strategies for anti-counterfeiting: France
As a member of the European Union and the World Intellectual Property Organisation, France complies with EU regulations and directives, as well as all the major international treaties on IP rights. As such, EU trademarks and Community designs are protected throughout the French territory. The French IP Code also provides statutory provisions to protect other IP rights (eg, copyrights 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 Customs Regulation 608/2013 and strengthen the fight against counterfeiting and infringement. The new EU Customs Regulation 608/2013 and corresponding Implementing Regulation 1352/2013 are thus fully applicable to France, and are transposed in Article L 335-10 (for copyrights), Article L 614-32 (for patents), Article L 716-8 (for trademarks), Article L 722-9 (for geographical indications), Article L 623-26 (for plant varieties) and subsequent articles of the IP Code.
When the EU Customs Regulation does not apply (eg, when the suspected goods are not entering or leaving the customs territory of the European Union from or to countries outside of the European Union, but are coming from another EU country or from France), rights holders can rely on the national provisions of the French IP Code. The French Customs Code will also apply to Customs and criminal procedures.
The fight against counterfeiting and the defence of IP rights require surveillance both within the national territory and at the borders of the European Union in order to block the introduction of counterfeit goods and their sale on the internal market. According to the 2017 Situation Report on Counterfeiting and Piracy in the European Union, defence at the borders is still considered to be far more effective than detaining goods once they are in circulation. French Customs therefore plays a strategic role through its presence at the borders of France, at airports and ports, as well as its ability to act anywhere in the French territory, including French overseas departments and territories. It is made possible because of the extensive control and investigation measures that Customs has for searching and examining goods, transport and persons, including the right to communication of all commercial documents.
Before any request for intervention at EU borders is made, French customs authorities may automatically detain goods suspected of counterfeiting IP rights for up to four working days, during which time the rights holder can formally file an application for customs intervention. If the IP rights holder fails to file such an application in the four-day period, French Customs will immediately release the products on the market. In general, customs detention is made at the request of the rights holder or an authorised third party (eg, an exclusive licensee) after the submission of an application for action in EU territory or France. Such application is granted for one year and can be renewed for an additional year. Following receipt of notification from Customs regarding the detention of goods suspected of infringing an IP right, the applicant has 10 working days (or three working days in case of perishable goods) from the notice of the customs detention to confirm the infringing nature of the detained goods, ask for their seizure and destruction by Customs or bring legal proceedings (civil or criminal proceedings or criminal complaint). In such a period, the IP rights holder or authorised third party can request Customs to:
- be provided with a sample of the detained goods strictly for the purposes of analysis and to facilitate the subsequent procedure in relation to the counterfeit and pirated goods; and
- lift the customs secrecy provided by Article 59bis of the Customs Code by communicating:
- names and addresses of the consignee, consignor and declarant or owner of the goods;
- customs procedure and origin; and
- provenance and destination of the goods, the release of which has been suspended or detained.
In France, unlike other EU jurisdictions, such information can be used only to initiate legal proceedings. If the information is used for other purposes, Customs can abrogate, suspend or refuse to renew the customs request for intervention. If the IP rights holder or authorised third party does not confirm infringement or initiate legal proceedings within the 10-day period, the detained goods will be released. This 10-day period can be extended by an additional 10 working days on a duly justified request by the IP rights holder or authorised third party.
The EU regulation and the French IP Code also provide for a specific procedure for the production of goods in small consignments where such goods can be destroyed by French Customs when the declarant or owner of the detained goods consented to their destruction or remained silent in the 10 working days from the customs notifications. Indeed, in the latter case, the declarant or owner of the detained goods is deemed to have agreed to the destruction of the goods. To benefit from this procedure, the IP rights holder must have requested the use of the procedure in its customs application.
As from 1 January 2019 (in application of the Order of 11 December 2018), the rights holder must reimburse Customs for its expenditures in managing, storing, handling, transporting and destroying goods suspected of being counterfeit.
The customs withholding regime resulting from EU Regulation 608/2013 (12 June 2013) does not set out any provisions likely to render ineffective Nokia case law (European Court of Justice (ECJ), 1 December 2011, C-446/09 and C-495/09, Nokia and Philips). European Customs have 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, subject of a “commercial act directed at European Union consumers, such as a sale, offer for sale or advertising” (Point 57). This decision had a terrible impact on the number of products stopped by French Customs in the EU territory. However, European legislature took measures to balance the interpretation of the ECJ in the adoption of the trademark reform package, which includes EU Regulation 2017/1001 (14 June 2017, replacing the amending Regulation 2015/2424 , which came into effect on 23 March 2016) and EU Directive 2015/2436/EC. 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 trade mark which is identical with the EU trade mark registered in respect of such goods, or which cannot be distinguished in its essential aspects from that trade mark.” The seizure of those 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 on the market in the final destination country. These provisions therefore reverse the burden of proof set out in Nokia.
In a 7 March 2018 decision, the French Supreme Court mentioned the autonomy of the customs procedure. The court pointed out that the customs administration 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 offences are autonomous, they are sufficient in themselves to justify the seizure of the goods by the customs administration.
An IP rights infringement may be condemned through either a civil or criminal action. Criminal proceedings are not the most favoured option for IP rights holders, but criminal penalties are usually considered to be more dissuasive for infringers. The criminal process is inquisitorial in France, meaning that in many cases (except for minor offences) the judge plays a role in the conduct of the investigations and is responsible for preparing the case for trial. Criminal investigations are performed by the judicial police or Customs under the authority of the Prosecutor of the Republic or a special investigating judge.
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 complaint filed by the rights holder.
If the infringement is characterised, the infringer may be sentenced to three years’ imprisonment (seven years in certain circumstances) and a fine of up to €300,000 (or €750,000 in certain circumstances). Criminal courts may also order the removal of the infringing goods from commercial circuits at the infringer’s expense, the total or partial closure of the establishment used for committing infringement, and the publication of the judgment. Article 414 of the Customs Code also provides that customs penalties can be increased to up to 10 years’ imprisonment and a fine up to five times the value of the infringing goods in the event that the offence is committed by an organised criminal group. Award for damages may be obtained by the IP rights holder if it brings a civil complaint and takes part in the criminal proceedings. Damages are often lower in criminal courts than in civil proceedings.
In France, trademark infringement proceedings are brought before specialised courts. Only 10 courts have jurisdiction in IP matters. The Paris Court has exclusive jurisdiction over actions regarding patents, EU trademarks and Community designs. The IP rights holder (or exclusive licensee, if it is authorised to do so) can demand an action for infringement within five years from the day on which the rights holder knew or should have known of the infringing facts.
The seizure operation known as ‘saisie-contrefaçon’ is a highly efficient means to prove infringement in France. It is a pre-trial procedure that allows IP rights holders to obtain from the president of the competent specialised court an ex parte court order authorising a bailiff, with the assistance of police officers if required, to collect evidence of the infringement at the premises of an alleged infringer, a shop, Customs or at a fair. Simultaneous seizures are sometimes necessary, and coordination is therefore required to preserve the effect of surprise. As it is an ex parte proceeding, conducting the operations by the bailiff is strictly circumscribed. In this respect, the French courts regularly invalidate seizures which do not satisfy the mission given to the bailiff by the court. The Supreme Court recently reaffirmed the public order nature of the nullity sanctioning a seizure which exceeded the limits of the authorisation granted by the court order. During the seizure, the bailiff is usually authorised 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 as from the date of seizure under penalty of the latter being declared void.
The IP rights holder can seek the specialised IP courts to obtain preliminary injunctions to stop any acts of alleged infringement. In order to access such measures, the complainant must provide evidence of the plausibility of the infringement.
Depending on the degree of urgency, the complainant may choose to request preliminary injunctions through the référé d’heure à heure or référé procedures – both of which are adversarial procedures. Preliminary injunctions can be ordered in a few weeks in case of a référé d’heure à heure and a few months in case of a référé. In rare circumstances, the IP rights holder may request injunctions through the requête procedure, which is an ex parte procedure where the decision is rendered within a few days.
Preliminary measures are immediately enforceable and usually ordered subject to penalties. There can be a precautionary seizure of the alleged infringing goods or provisional prohibition. The judge can also order the payment of provisional damages. These injunctions can be obtained against the alleged infringer, but also against intermediaries (eg, a transporter, an e-platform or an internet service provider (ISP)) even though the action on the merit is not aimed at them but against the alleged infringer.
These preliminary proceedings can be initiated either before or after the filing of a court proceeding on the merits. If obtained before a proceeding on the merits is initiated, the rights holder must file an action on the merits within 20 working days or 31 calendar days. Otherwise, all preliminary measures will be revoked at the risk of being ordered to pay damages.
Remedies are available to rights holders regardless of whether the infringement is intentional. Punitive damages are not available under French law. French law prohibits both direct and contributory infringement.
French courts consider the following criteria when determining the amount of compensatory damages to award:
- the negative or detrimental economic consequences of infringement (including lost gains and losses suffered by the rights holder);
- the moral harm suffered by the rights holder; and
- the profits earned by the infringer (including intellectual, tangible and promotional investments saved or not incurred by the infringer).
As an alternative and on request by the rights holder, the court can set the 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. This amount is not exclusive of compensation for moral harm caused to the IP rights holder.
Memoranda of understanding, good practice guides and public campaigns are among the many soft-law measures that can be taken by trademark associations, brand owners and sometimes online marketplaces to tackle online counterfeiting on a global scale, as well as the more traditional means of action taken by brand owners or law enforcement authorities through customs intervention, civil and criminal proceedings. ISPs can 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 is playing only a passive role, it could be held liable under the Act on Confidence in the Digital Economy (21 June 2004) only if, on receipt of a notification from the IP rights holder informing the ISP that the content is unlawful, it fails to remove it or disable access 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 implement preventive measures (eg, technical detection measures) and active measures (eg, notification procedure from brand owners). The French Trademark Office (in collaboration with the National Anti-counterfeiting Committee) is the authority monitoring the application of this agreement.
At the European level, many initiatives and good practices are also 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 EU Intellectual Property Office. 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.
It is possible to apply for customs surveillance with Customs – and it seems to be one of the most effective measures available. This process, which is easy and free to implement, is valid for one year and renewable on request.
In general, all preliminary measures can also be considered as strategic tools before any measures may be decided on the merits. Opposition or cancellation action against an infringing trademark application or registration, or Uniform Domain Name Dispute Resolution Policy proceedings against domain names filed in bad faith, is also a way to prevent future infringement as soon as it is filed or registered.
Certain luxury brands have also set up an operational cooperation with the customs administration of countries particularly confronted with the importation and sale of infringing goods or even directly via online sales website.
Similarly, soft law can be an alternative to the formal fight against counterfeiting. Awareness campaigns organised by luxury and fashion houses, as well as charters such as the one signed in 2009 by certain online platforms, seem to anchor the fight against counterfeiting both in the French commercial and public landscape.