Presentation
A registered trademark is a distinctive sign that allows a company to differentiate the products and services it offers to its customers, distinguishing itself from other providers in the sector, including competitors. As such, a trademark, as intellectual property, can have considerable economic and financial value depending on its reputation among consumers.
Legislative provisions governing intellectual property and civil law can be combined to protect trademarks and identifying elements of companies. To clarify the scope of these protections, the case law of national and international courts is essential. In this context, the French Court of Cassation regularly issues rulings detailing the conditions for applying the relevant rules.
Court of Cassation, Commercial Chamber, May 3, 2016, No. 13-23416
In a landmark ruling dated May 3, 2016, the Commercial Chamber of the French Court of Cassation reiterated the important distinction between actions for trademark infringement and unfair competition. More specifically, it established the requirement that these combined actions be based on distinct facts to be validly recognized. The Court thus reaffirmed the European Union’s position, which stipulates that an action for unfair competition, based on facts identical to those underlying a dismissed trademark infringement claim, may nevertheless be deemed admissible if the infringement claim is dismissed for lack of an exclusive right and if wrongful conduct on the part of the respondent is established.
In this particular case, two companies were sued for trademark infringement, unfair competition, and parasitic competition based on a seizure report for counterfeit goods concerning shoes.
Intellectual Property: Counterfeiting & Unfair Competition
They were accused, in particular, of having used the trademark of the company found guilty of counterfeiting, while the company whose shoe design had been counterfeited demonstrated that it marketed the product under its own brand and produced a series of accounting documents proving that the counterfeit shoes were being sold at twice the price of the originals.
The Court of Appeal rejected the claim for damages based on acts of unfair competition and parasitic behavior, ruling that the actions in question did not constitute distinct elements from those of the counterfeiting itself.
Civil action: unfair competition distinct
The Court of Cassation will overturn the ruling, citing Article 1382 of the Civil Code, finding that “by ruling in this way after having established that affixing the M. trademark to the counterfeit shoe discredited the K. collection in the eyes of clients and consumers alike, and that this resulted in damage to the image of the K. trademark—facts distinct from the slavish copying of the J. model, which constituted the infringement—the Court of Appeal violated the aforementioned provision.”
According to the highest court, an action for unfair competition is based on the fault of a player in a free market. It is not a question of protecting a trademark or a creation as defined by the Intellectual Property Code, but rather a company.
In contrast, an action for infringement requires proof of infringement against the holder of an exclusive right to a sign or creation that has been violated.
The Court of Appeal (May 14, 2013, No. 2011/08834) overturned the judgment of the Commercial Court of Nantes (September 29, 2011) by ordering the company to pay €150,000 in damages to the applicant for infringement.
