French practice acknowledges that IP valuations are subjective!

Departments

Written by Jean Philippe Bresson Tuesday, 04 October 2011 14:53

The French Council of State has upheld some months ago a very interesting position regarding to the possible gaps which may arise as to the valuation of trademarks and more generally of IP assets. It was held that there is no irregular management action when a trademark is assigned for only 1 (one) Franc by a mother company to its sub-company and when, a few days later, this very same trademark is valued at 10 (ten) million Franc (!) in the context of an assignment to a competitor of the titles constituting that sub company. Who said that valuation of IP assets was not a subjective approach? This decision is at least a main point to consider towards the fiscal administration.

 

KEY POINTS FOR CONCEPTS PROTECTION

Departments

Written by Eric Schahl Wednesday, 14 September 2011 15:50

What is the situation ? You have created a concept in your country and you want to export it outside. The question is : what about IP and IT rights ?

How can I protect my concept, my domain name, my mark ? where is the danger, how can I anticipate the situations ? how can I limit the expenses ?

Let’s remind that these questions of mark, concept and know-how for example are crucial in a franchise relationship as franchise is basically a mark, a know-how and duplication of a success.

- Filing its trademark on an international basis : how to proceed ?

* First question to answer is to ascertain which should be the applicant of the mark, i.e. should you file the mark personally or in the name of a company ?

Most of the time, you have already filed the mark in your country of origin so that the applicant is known.

If your mark in your country has been filed in the name of the company there is no specific remark except that if you want to beneficiate from the Wipo system – which is the simplest and cost efficiently way - (corresponding to the Madrid Agreement and Protocol) the company should be located in a country which has adopted the Madrid convention.

For instance if you company is located for tax reasons in Dubai you will not be able to file the “international trademark” of Madrid convention and will be only allowed to proceed via national applications which are much more expensive.

If the mark is filed in your own personal name in your country, the question whether the extensions of protection are to be made in the name of you or a company is of importance. Indeed, the franchisee awaits from the franchisor a guaranty that he can use the mark freely and, in case of a third party attacking for infringement on the basis of prior rights, he will ask for the mark owner’s responsibility.

Being personally responsible on his personal properties is highly risky and not advisable.

Our advice, except specific situation, is consequently not to extend the mark in your personal name.

* national mark, EU mark or international mark ?

As you probably know, there are 3 ways to protect a mark in a country France for instance :

- first via national filing which is the most expensive way

- second via international filing before Wipo in Geneva (Madrid agreement) provided you have a registered mark in your country

-  third via community application before Oami in Alicante

The advantage of the Wipo trademark is that, once the mark is registered, it explodes in as many as rights as there are countries claimed.

Each right is legally independent from the others. Which means that there is no contagion of a problem in a country to another country.

But the international mark is linked with the country of origin one for the first 5 year period meaning that in case of a problem on the country of origin mark, this will affect immediately the international mark. And the mark has to be used in each country it is protected.

On the contrary, an EU mark is unique, a problem in one country concerns the whole EU mark and usage is part of the EU is considered as use in the whole EU.

Due to this global character of the EU mark, we can say that EU marks are more dangerous than international marks.

* usual marks and unusual marks

Just a word to remind that trademark protection is not only open to word or device mark but, under conditions, also to colours, to shape of product, to music, etc.

The protection of a concept therefore invites to study the elements of your concepts which could be protected under trademark law although these elements are not limited to the name of the concept.

We just have a court case in France where it has been said by the judges that the interior look of a shop cannot be protected by trademark law (Sephora vs Patchouli case).

* how to handle an international search ?

Only a similar search (and not an identical search) can ascertain whether it is possible to freely use such name.

The question of searches is an important one as you will give to your franchisees a guaranty of peaceful usage of the mark.

Our recommendation is therefore to :

-      protect your mark via international system of Wipo

-      make similar searches prior to the filing

-      make the searches in the countries where you have short term plan to develop the concept

-      fix a date by filing trademark in countries where you have long term plans

* what can you do if the search reveals prior rights ?

There are only 2 solutions :

- to adopt clearance measures

- to modify the name

There are 4 types of clearance measures namely :

* license contract (to disregard)

* cancellation action for non use (dangerous because we have only the result of the action in a one year period)

* coexistence agreement (good solution if it is obtained except that we have to disclose the name and if the other side says “no” the file is over)

* to purchase the prior mark (this is most of the time a good solution as it preserves the confidentiality, the price is most of time rather low if the mark has more that 5 years and is not used).

Modification of the name is most of the time the cheapest way to handle the case : the new mark is built up to prevent conflict with the mark revealed in the search.  However, the disadvantage is that there is no uniformity of name in the different countries.

- Reservation of domain names :

* which extension to adopt (local or international) ?

French people prefer extension in .fr and we have no restriction on nationality for such reservation.

It is to be noted that a DN creates rights in a country or infringes third party rights when it is clearly directed to the country (local phone number, local currency, local language, etc.)

* what can you do if the name you want is already reserved ?

There are 2 very different situations if the DN is simply reserved but inactive or if it reserved and corresponds to an active web site.

If it is a simple reservation, most of the time the DN can be purchased for a reasonable price and, in any event, does not constitute a legal bar to your project. It is only the active domain name which creates a right to its owner for the activity corresponding to the website.

If there is an active website, you have to look at the activity of the website to ascertain whether it is a legal risk or if you just have to choose an approaching DN (in this last case you will have a question

* some mistakes to avoid ?

The main point is to separate the one handling for you the domain name, the one who is in charge on the content of the web site and the one who is in charge of the hosting of the website.

The global idea is to be free to stop your relationships with each of them without being victim of blackmail in the same time.

- Protecting your concept on an international basis : how to proceed ?

* there is no unified filing which permits to protect a concept globally.

* the protection of the concept is therefore the combination of several kinds of measures (trademark protection, model protection, patent protection, contracts, etc.)

* to be noted that although France has an extensive conception of copyright, most of the time companies which attack a counterfeiter under copyright loose the case as the judges are reluctant to consider the originality of the concept. It is much efficient to base the action on a combination “infringement of registered rights + unfair competition”

Protection of your wine trademarks in China: INLEX IP EXPERTISE in frontline alongside with the European Union

Departments

Written by Jean Baptiste Thial de Bordenave Wednesday, 03 August 2011 12:22

Within the framework of the negotiations between the European Union and China, the representatives of our industries exposed the difficulties met in China in terms of counterfeiting acts.

INLEX IP EXPERTISE, through his department Lex’Wine, has drawn the attention of the European Commission on the constant problem of “trademark squatting” experienced by the wine trademark owners.

For the record, this fraudulent practice consists in the registration of French "chateaux" trademarks, well known or even not so notorious , by some Chinese private individuals or experts.

This situation applies when the French chateaux have not filed their trademark in China. The Chinese applicant of the trademark (or its translation in Chinese ideograms) can then easily sue for counterfeit the legitimate owner of the mark even if the products are already sold on the Chinese market. Accordingly, the Chinese applicant may succeed to put the French winemaker out of the Chinese market.

The European Commission has been receptive to this problem and should include it in the agenda of the next negotiations’ round which will take place in the next fall.

Accordingly, INLEX IP EXPERTISE, who regularly works with the European Commission, opts for an pro-active and global resolution of the problem rather than being simply passive and doing work when requested by clients. Of course the objective is being more efficient and to limit the legal costs as low as possible.

Accepted grounds of action against GOOGLE (AdWords)

Case law

Written by Jean Philippe Bresson Wednesday, 22 June 2011 15:07

On May 11, 2011, the Court of Appeal of Paris upheld the liability of Google Inc. could be enforced (together or not with the liability of the advertiser), under the grounds of unfair competition, misleading advertising and illegal comparative advertising.

The Court actually confirmed the findings of that Trade Court had first ruled, including the allowance of 100.000 € as damages. The Court of Appeal only excluded the liability of Google France because www.google.fr is hold by Google Inc (which liability was thus maintained).

In this mater French company Cobrasson sued Google companies and Home Cine Solutions which website was displayed together with the wording ‘pourquoi payer plus cher’ (i.e. ‘why do you want to pay more?’) when a search was on made on Ggoogle for the word ‘Cobrasson’. Holme Cine Solutions actually was one of the direct competitors of Cobrasson.

With the uncertainty resulting from the CJEC rulings of March 2010 on how to enforce one’s rights against Google out of trademark infringement, the decision offers alternative grounds to be considered including for trademark owners.