Reform of the trademark system and its practical consequences

On December 10, 2019, Decree n°2019-1316 of December 9, 2019 was published in the Official Journal. It marks the entry into force of the ordinance 2019-1169 of November 13, 2019, taken following the “Pacte” law and transposing the (EU) directive 2015-2436 on trademarks. These texts lead to substantial changes in the national trademark system, both in terms of the substantive conditions of protection and in terms of administrative and judicial procedures.

This newsletter is an opportunity to take stock of the main changes brought about by the reform which are, for the most part, applicable since December 11, 2019. This first part reviews the changes made to the substance of trademark law. The second part, devoted to the reform of procedures, will be published soon in our 16th newsletter.
 

CHANGES IN THE SUBSTANTIVE CONDITIONS OF PROTECTION

END OF THE REQUIREMENT FOR GRAPHIC REPRESENTATION OF THE TRADE MARK – Whereas until now, any trade mark had to be filed in the form of a graphic representation (verbal or numerical elements, 2D or 3D drawings, etc.), it must now simply “enable any person to determine precisely and clearly the object of protection”. This measure will make it easier to protect sound trademarks (hitherto required to be represented in the form of a musical stave or sonogram), or video or multimedia trademarks, such as jingles or moving logos. Filing will be done through the supply of an electronic file in acceptable formats – JPEG, MP3, MP4 – which have been the subject of a joint declaration by the network of offices of the Member States of the European Union.

>> It remains to be seen to what extent these marks will find their public; EUIPO, before which such filings have been possible since October 1, 2017, has so far registered only 24 multimedia marks, 38 movement marks, and 41 sound marks. The examination of these “new generation” trademarks does not seem to pose any particular difficulty before the European office; the main reason for rejection is the lack of distinctive character, when the sign is not likely to be perceived by the consumer as identifying a specific origin.

MODIFICATIONS TO THE ABSOLUTE REASONS FOR REFUSAL – The previous Directive had been partially and sometimes imperfectly transposed into French law, generating uncertainty in the case law for many years. This time, the wording of Article L.711-2, which lists the absolute grounds for refusal or invalidity of trademarks, is substantially aligned with that of the European text. This change is not only terminological, it is likely to influence the examination of trademark applications by the INPI.

Two developments are to be noted in particular:

On one hand, a “sign consisting exclusively of the shape or other characteristic of the goods and imposed by the nature of the goods themselves, which is necessary to obtain the technical result or which confers substantial value on the goods” may be refused or declared invalid.

>>The alternative “or other characteristic” was added probably to apply to noise or movement of the product or service concerned.

On the other hand, a trademark application filed in bad faith also constitutes an absolute ground for refusal.

>> It was already the case with respect to the European Union trademark, however, in the French system, it was only possible to request the cancellation of a trademark filed in fraudulent manner, which required proof of the applicant’s intent to cause harm. This demonstration will no longer be necessary in the future, which should make it easier to punish a trademark registration made in an unfair manner, particularly after the failure of negotiations or the end of a collaboration between the parties, or when the owner did not intend to use it but only to prevent the entry of competitors into the market; on this last question of the link between intent to use and bad faith, the Court of Justice of the European Union is expected to give a preliminary ruling in the coming weeks, in the case C-371/18 Sky.

MORE RELATIVE GROUNDS FOR REFUSAL – Article 711-3, which lists a non-exhaustive list of grounds for refusal or invalidity of a trademark in the event of infringement of earlier rights, is also enriched with new grounds.

Among them is the infringement of a trade mark with reputation where the later trade mark, without just cause, would take unfair advantage of, or be detrimental to, its distinctive character or reputation.

>>This claim could hitherto only be invoked in a civil liability action. This amendment will allow the owner of a trademark that has acquired a reputation to bring an action for infringement or nullity before the INPI, in particular when a trademark, even when used for different goods and services, follows in its wake and takes advantage of its reputation.

Will also be sanctioned, as in the European Union’s trademark system, the filing made in France by the agent or representative of the owner of a trademark protected in a State party to the Paris Convention, in his own name and without the owner’s authorization, unless the agent or representative justifies his action. In the latter case, the owner will also have the possibility, offered by Article L.712-6-1, to oppose the use of this trademark or to request its assignment for his benefit.

Finally, other prior rights that were already recognized by case law are now enshrined in the law, such as the name of a public entity, or the domain name, the text of which specifies that it must be “not only local” in scope.

>> This last clarification augurs well for some jurisprudential developments regarding the proof of the “not only local” scope of a domain name. This notion is not new since it has traditionally applied to signs and trade names, which could only be the basis of a civil liability action for infringement if their holder proved that they were operated in a context that goes beyond the mere local context. The Court of Justice has defined a number of criteria for assessing “more than local scope”, relating to the duration and intensity of the use of the sign, both for consumers and suppliers. The regional scope of a use is generally not sufficient to satisfy this condition.
In France, in a case in 2006 (defended by our Firm), the Paris Court of First Instance ruled that a trade name and a sign ADIM SUD were an obstacle to a later trademark ADIM because of “numerous advertising documents, contracts and commercial letters which establish that its trade name and sign have been known since that date throughout the territory”.

STARTING POINT OF THE NON-USE DELAY – the Law clarifies the starting point of the five-year period of non-use to be taken into account when assessing whether a trademark is liable to lapse in the light of the evidence of use submitted. Thus, it specifies that this starting point is set “at the earliest on the date of registration”.

When proof of use is requested in the context of an opposition, use of the earlier trademark must be proven in the five years preceding the filing (or the priority date) of the subsequent application for registration; In the context of a direct application for revocation filed before the INPI or the judge, the five-year period is the one preceding the application for revocation.

Finally, when non-use is invoked as a defense to a nullity action against a later trademark, the new article L.716-2-3 states that the owner of the earlier trademark must not only demonstrate:

• the genuine use of his trademark during the 5 years preceding the date of the application for a declaration of invalidity.
• But also, genuine use during the 5 years preceding the filing of the subsequent trademark, when his trademark was registered more than 5 years before the filing of the subsequent trademark.

>> This last mechanism appears particularly strict, since it comes down to “accumulating” the periods during which the owner must be able to demonstrate the use of his trademark. However, it should be put into perspective with the imprescriptibly of the trademark invalidity action, which is now the rule (see part II in our next Newsletter)..

RIGHTS CONFERED BY TRADEMARK – The reform makes few changes to the rights conferred by the trademark. However, it introduces a ban on the transit, on the national territory, of counterfeit goods coming from and going to a third country.

This provision puts an end to a controversial case law of the European Court of Justice (C-446/09 and C-495/09, December 1, 2011, Koninklijke Philips Electronics NV) which ruled that goods in transit in the European Union from a non European Union member country and bearing a protected trademark could not be seized by the customs authorities unless it was proven that they were in fact intended for sale in the European Union, which is in fact almost impossible. It should be noted that an equivalent provision that recently came into force for EU trademarks led to the restoring of customs controls on goods in external transit suspected of constituting counterfeit goods that had been suspended following this “Philips” case law.

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The practical implementation of this reform will be closely monitored, as will the procedural aspects of the reform, which will be presented to you in our next Newsletter.

Patents are not to be forgotten since the “Pacte” Law announces major changes in the French patent granting regime; while a first decree implementing this law was published in the Officiel Gazette on January 10, 2020, extending the duration of utility certificates and creating the provisional patent application, an ordinance and a decree establishing an opposition procedure are expected by February 22, 2020 at the latest. All these changes will also be the subject of our comments in a future newsletter.

Please do not hesitate to contact us for any further information:

Delphine RUDLOFF
Partner
Attorney at Law
Head of the Trademarks and designs Department

Mathilde JUNAGADE
Senior Legal Counsel
Former member of Legal Department of the Institut National de la Propriété Industrielle (INPI)