#IPLaw – Rather seizure for counterfeiting or discovery procedure?

Let’s start with a story that can be that of your company.

After long efforts, the company may have products recognized by its clientele as qualitative, including its distinctive signs and its constant search to offer high-performance products.
Whenever the customer recognizes the color, the name, the form, he expects to renew a more than satisfactory experience that he has already had with the products of the same company, and may expect to have additional advanced technical innovations.

Given the success of the first company, a second competing company may consider investing in the same market and offering similar products. Therefore, there is a limit not to be crossed, the freedom of the second company ending at the frontier of the intellectual property rights of the first one when they are regularly established.

If the competing company uses an identical or similar distinctive sign, to be compared to a registered trademark, there is a dispute on grounds of trademark infringement. If it is a technological innovation protected by a patent, it is rather a patent infringement.

But how to provide admissible proof that my competitor has reproduced my mark or my innovation (French procedures)?
1 °) The holder can mandate a bailiff to make a purchase statement. In essence, the bailiff buys the product and places it under seal.

This evidence is limited because there are usually a lot of commercial intermediaries. In addition, it is inoperative in most cases of infringement of a process patent.

2 °) The “royal” way is the seizure for counterfeiting. As a historical procedure in France, and implemented in Europe by a so-called “enforcemment” directive (2004/48), the seizure for counterfeiting allows the holder of intellectual property rights regularly registered, to request from the competent judge of the Court of First Instance, on the basis of evidence and the industrial property title in its possession, to issue an order for seizure.

On the basis of this order, the Patent Attorney and a bailiff visit the premises of the competitor to make the seizure.

It can be a seizure of samples, industrial documents, accounting documents, descriptive seizure, photos of installations … as provided in particular Article L. 615-5 of the Intellectual Property Code.

The procedure is very framed. Form defects can cancel the seiure. The appelant must commence an action on the merits within 20 business days or 31 calendar days after the seizure. If not, the seizure will be canceled.
In addition, the seizure is made by agents who are bound by professional secrecy, so much so that the secrecy of the business is not violated.

An abusive seizure engages the responsibility of the appelant, who will have to pay damages.

The purpose of the seizure for counterfeiting is to be able to provide substantial evidence of infringement of the rights from within the defendant’s company. Revenue from counterfeiting can be deducted as well as the product distribution chain.

Even if the procedure seems invasive, it is very framed so that fundamental rights are not violated.

Other jurisdictions such as those in the United States are based on so-called discovery procedures, where parties must exchange as much information as needed without hiding anything. In general, the most wealthy parties flood the other parties with an infinity of documents to be reviewed by the advisors. The less wealthy parties should take of their time, which would have been used for production, to search for the documents and send them to the other parties.

In comparison, the seizure for counterfeiting would go to the heart of the issue and enable to quickly collect information that is needed, unlike the discovery procedure.

We remain at your disposal for any additional clarification you may need.

SOPERYAH IP

#IPLaw, #IPBasics – Detention under customs control and custom seizure of more than 8000 counterfeit automobile parts in Drôme and Indre (FR)

EU law allows a regime of keeping goods in detention under customs control, when they are suspected of infringing industrial property rights.

Needless to say, it is important that rights must first be registered to justify the use of this regime.

Under this scheme, the procedure in France allows custom agents to retain imported goods by refusing any release for 10 days. Detention under customs may be initiated by a written request from the IPR holder, or on the own initiative of the custom agents.

The filing of a request for intervention of the customs is free of charge. The request is valid for one year, and renewable by a written request. As provided by law, when the goods suspected to be infringing are immobilized during a detention, the IPR holder must justify, within 10 working days, either of provisional measures or of the introduction of a legal action.

Within this period, the customs contact the right holder in order to have the goods appraised by an expert, generally the IP atorney of the right holder, to recognize whether or not the detention is justified and whether an infringement of industrial property rights is characterized.
Subsequently, according to the procedure, the holder can request the destruction of the goods in the absence of express objection from the importer. This is generally called the simplified destruction procedure. Alternatively or cumulatively, the holder may bring an action for infringement against the importer.

Actually, even without action by the owner of the IP rights, in some cases the customs authorities usually use their customs powers to destroy counterfeit goods, in obvious cases.

Thus, at the beginning of September this year, according to the provisions of the procedure, the customs office of Valencia (FR) has selected among the import declarations received, one particular from Turkey.

After checking the goods, the customs officers discovered window lift systems, door openings, and door handle parts. The customs announcement states that “none of the plastic packaging containing the car parts contained the wording “adaptable to “”, which suggests that the packages in question mentioned the names of the car trademarks.

The expertise of the holders of IP rights has recognized 3 740 spare parts as counterfeits. These counterfeits have been subject to a simplified destruction procedure.

The information was transmitted to the service within the territory of the recipient company, so that an inspection could be made on its premises, which enabled the seizure of 4 300 additional parts considered as counterfeits, which subsequently underwent a simplified destruction procedure.

In 2017, the French customs seized more than 8.4 million counterfeits articles in France.

Of course, the importer in good faith may request the intervention of an IP Attorney to make legitimate disputes and avoid having to cease his activity because of significant unjustified losses.

SOPERYAH IP

#IPBasics – Trademarks

In the same was as for patents and design rights, the trademark rights is a title deed, with the particularity of protecting a distinctive sign for the designated products and / or services. As a tite deed / right, it enters the company’s assets and significantly affects its valuation.

The case law concerning what can be the subject-matter of a trademark registration is abundant. What raises least objections is to go for a sign subject to graphic representation, such as numbers, letters, a word, a sentence, a drawing / logo, a combination of colors … (Recent EU law increase the possibilities).

A protectable sign must not be desptive (ie: likely to mislead the consumer as to the nature or origin of the product or service), or descriptive (ie describing features of the product or of the service covered).

The principle behind trademarks is to enable the consumer to associate your competitive advantage with your business. For example, if a consumer sees a sign on a third-party product that makes them think it’s your product (because of the similarity to your brand), the third-party has actually infringed your trademark.

It is therefore important to quickly take advantage of these prerogatives by “marking” your competitive advantage over your products and / or service with a trademark filing covering the countries where you operate. You will be able to use this legal weapon at least in a dissuasive way vis-à-vis your competitors. In addition, a registered trademark always makes a good impression in the mind of the consumer and could in fact significantly increase your sales. This makes the trademark an effective commercial weapon.

The trademark can be renewed without limit of duration.

The value of the trademark is generally determined by the income provided by the goods or services covered by the mark evaluated in relation to the same product without the said mark.

For example, in the top 100 published by Forbes magazine in 2017, the Apple trademark has an estimated value of 170 billion US $. The first French brand (20th of the top 100) is Louis Vuitton with 28 billion US $.

The path is long, so on your marks …

SOPERYAH IP

#ProfitIP – Profitability of IP (RTC)

In view of the high costs that patent expenses can represent, in addition to marketing efforts, it is important to use tax tools in order to have a good profitability of the patent portfolio.

Research tax credit (RTC)

Beneficiaries:
Companies of any status subject to companies tax (IS) or income tax (IR).

Elligible expenses:
Expenses related directly or indirectly to R&D, including patent and watch fees, salaries, depreciation allowances of immobilisation and of patents,… and even expenses related to the creation of new collections in the textiles-clothing-and-leather field.

NB: Expenses of experimental agricutural stations and farms are doubled.

Rate:
30%, up to 100 million euros; 5% beyond.
(For DOMs 50%, up to 100 million euros, 5% beyond).

SOPERYAH IP

#IPBasics – Patent of invention

As well as for Trademarks and design rights, a patent is a title deed, with the particularity of protecting a technical innovation. As a title deed, it is part of the company’s assets and significantly affects its valuation.

The caselaw concerning the technical nature is abundant. Schematically, a claimed object is legally considered technical when it includes concrete elements or hardware elements of the computer field.

The devices, methods, and compositions are unanimously considered as being technical.

Pure software is considered non-technical. One solution may be to argue about the advantages of software over the hardware.

Another subject of caselaw relates to the patentability relating to life (genetic sequences, protein, micro-organisms, transgenic plants or animals …).

The principle of patent is that the inventor communicates his innovation to advance society in terms of technological progress. In return, the society grants a legal monopoly over the innovation in question for a limited period, usually 20 years.

It is therefore important to quickly take advantage of this monopoly to generate revenues from innovation with the advantage that no competitor has the right to propose the same innovation. This makes the patent an effective legal weapon. In addition, patent revenues can be increased when customers know that the innovation has been filed for a patent. This makes the patent an effective commercial weapon.

The profitability of a patent is all the more important as the costs of obtaining and maintaining patents are important.

SOPERYAH IP